Ms. Kraft owns 80,000 shares of the common stock of Copperhead Corporation with a market value of $8 per share, or $640,000 overall. The company is currently financed as follows:

Copperhead now announces that it is replacing $1 million of short-term debt with an issue of common stock. What action can Ms. Kraft take to ensure that she is entitled to exactly the same proportion of profits as before?

What percent of the firm does Ms. Kraft currently own? (Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places.)

Ownership Percentage = %

Should Ms. Kraft Borrow or Lend? And by How Much $____?

Common stock (8 million shares) Short-term loans Market Value $112 million $2 million