Use TheUse the Firm Has Only Been Listed on the Stock

question 35

Multiple Choice

Use theUse the firm has only been listed on the stock exchange for a short time,you do not have an accurate assessment of Nielson's equity beta.However,you do have the following data for another firm in the same industry: Nielson has a much lower debt-equity ratio of .5,which is expected to remain stable,and Nielson's debt is risk free.Nielson's corporate tax rate is 21%,the risk-free rate is 5%,and the expected return on the market portfolio is 10%.
-Nielson's share price is closest to:

• A)$19.57.
• B)$24.40.
• C)$27.50.
• D)$31.20.

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Definitions:

Subjective Feeling

Personal, internal experiences of emotions that are influenced by individual perceptions and interpretations.

Subjective Feeling

Personal experiences of emotions or sensations that are influenced by an individual's own perceptions, thoughts, and experiences.

Crowding

The perception of having less space available due to a high density of people or objects, often leading to discomfort or stress.

Commons Dilemma

A situation where individual users of a shared resource act independently according to their own self-interest against the common good of all users by depleting or spoiling that resource.