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League United is debating whether to convert its all-equity capital structure to one that is 41% debt. Currently, there are 1,870 shares outstanding selling at

League United is debating whether to convert its all-equity capital structure to one that is 41% debt. Currently, there are 1,870 shares outstanding selling at $75 per share. EBIT is expected to remain at $13,977 per year forever. The interest rate on new debt is 6%, and there are no taxes. Suppose that League goes through with the recapitalization, but you prefer the previous all-equity structure. You can unlever you position and re-create the original capital structure by selling a portion of your 100 shares and using that money to purchase the firms debt issue. How many of your 100 shares must you sell?

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