The answer is D. Why?

45. Company JKL has a market capitalization of $1.4 billion and 70 million shares outstanding. With $700 million in debt outstanding, JKL wants to now delever the firm by issuing new equity and using that money to repay all the debt outstanding. Assuming a Modigliani and Miller world without imperfections, what is the number of shares that JKL must issue closest to? A) $40 million B) $45 million C) $50 million D) $35 million