outstanding at a market price of $50/share. The company's earnings before interest and taxes are $128,000. Miller's has decided to add leverage to its financial operations by issuing $250,000 of debt at 8% interest. The debt will be used to repurchase shares of stock. You own 400 shares of Miller's stock. You also loan out funds at 8% interst. How many shares of Miller's stock must you sell to offset the leverage that Miller's is assuming? Assume you lona out all of the funds you receive from the sale of stock. Ignore taxes.
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