Once again, Debbie is dissatisfied by the firms policy and would have preferred a proportionally higher dividend to the buyback. How many shares should she sell back to the firm to replicate her desired outcome?

(25) Let Rocksteady Industries be an all-equity firm in a Modigliani-Miller world with 500 shares outstanding and a cost of equity of rE=0.15. Suppose that it has announced a dividend of 12 per share equal to its expected annual earnings