Northwestern Lumber Products currently has 24,500 shares of stock outstanding. Patricia, the financial manager, is considering issuing $177,000 of debt at an interest rate of 7.8 percent. Given this, how many shares of stock will be outstanding once the debt is issued if the break-even level of EBIT between these two capital structure options is $79,000? Ignore taxes.

Multiple Choice

17,330.05 shares

21,903.26 shares

19,207.47 shares

18,870.50 shares

20,218.39 shares