Assume that MM's perfect capital market conditions are met and that you can borrow and lend at the ...

B
Explanation:  B) Under MM I, the total value of With and Without must be the same.

Value(Without) = 1,000,000 × $24 = $24 million
Value(levered equity) = value(With) - debt = $24 M - $12M = $12 M
Price per share =   = $6.00

So, the leverage ratio of with is 50% equity to 50% debt.  To duplicate this in homemade leverage we need to have equal proportions in our portfolio, this means we need 50% equity and 50% from a margin loan.  So $5000 is our equity we need to match it with $5000 in a margin loan.  So the total invested is $10,000/$6 per share = 1667 shares