You currently own 1,400 shares of JKL, Inc. JKL is currently an all equity that has 200,000 shares of stock outstanding at a market price of $40 a share. The company's EBIT are $1,600,000. JKL recently decided to issue $4,000,000 of debt at 6 percent interest. This debt will be used to repurchase shares of stock Ignore taxes.

Part A: what is JKL's target debt to asset ratio? 50%

Part B: How many shares of JKL must you sell to undo the leverage? Assume that you can loan out those funds at 6% interest.