Novacell Inc. is a manufacturer of solar panels that is considering moving from its existing policy of not borrowing money. The firm has 4 million shares outstanding, trading at $ 25 a share, the firms current cost of equity is 12%. Assume that the firm can borrow $ 25 million at a pre-tax rate of 7% and buy back shares.

A) How many shares will be bought. (Use APV approach to find firm value)

B) Use FTE and WACC methods to verify your answer.