How many of shares of stock sell to offset leverage


Martin and Sons (M and S) presently is an all equity firm with 76,000 shares of stock outstanding at the market price of $30 a share. Company's earnings before interest and taxes are $89,000. M and S has made decision to add leverage to the financial operations by issuing $570,000 of debt with the 10% percent interest rate. This $570,000 will be utilized to repurchase shares of stock. You own 3,000 shares of M and S stock. You as well loan out funds at the 10% percent rate of interest. How many of shares of stock in M and S should you sell to offset leverage which firm is assuming? Assume that you loan out all of funds you receive from sale of the stock.

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Mathematics: How many of shares of stock sell to offset leverage
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