Selected Financial Information for the Baltimore & Ohio Railroad Corporation

Selected financial information for the Baltimore & Ohio Railroad Corporation (B&O) is provided in the table below. B&O is currently all equity financed, but it is considering a leveraged capital structure, details of which are presented in the column labeled 'Proposed'. Under the proposed capital structure, B&O will use all of the new debt to repurchase (and cancel) shares. How many shares will be left outstanding after the repurchase, if B&O buys shares for $30.00 per share? $$\begin{array} { | c | c | c | } \hline & \begin{array} { c } \text { Capital } \\\text { Structure }\end{array} & \begin{array} { c } \text { Capital } \\\text { Structure }\end{array} \\\hline & \text { Current } & \text { Proposed } \\\hline \text { EBIT } & \$ 150,000 & \$ 150,000 \\\hline \text { Debt, D } & 0 & \$ 1,500,000 \\\hline \begin{array} { c } \text { Cost of Debt, } \\ \\k _ { d }\end{array} & & \\&\text {N/A} &3\% \\\hline \begin{array} { c } \text { Shares } \\\text { Outstanding }\end{array} & 100,000 & - \\\hline \text { Stock Price } & \$ 30.00 & \$ 30.00 \\\hline\end{array}$$

A) 50,000
B) 100,000
C) 75,000
D) 25,000
E) 33,000