Use the Following Information to Answer the Question(s)below

question 19

Multiple Choice

Use the following information to answer the question(s) below.
Nielson Motors has a debt-equity ratio of 1.8,an equity beta of 1.6,and a debt beta of 0.20.It is currently evaluating the following projects,none of which would change Nielson's volatility. (All amounts are in $millions. )
-If Nielson Motors invests in only those projects which are beneficial to the stockholders,then the total debt overhang associated with accepting these project(s) is closest to:

• A)$22.5 million.
• B)$36.0 million.
• C)$38.0 million.
• D)$57.5 million.

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Definitions:

GDP

Gross Domestic Product, a measure of the economic production and growth, which quantifies the total value of all goods and services produced over a specific time period within a country.

Bicycle Company

A business entity that specializes in the manufacturing, distribution, and sale of bicycles and related equipment and accessories.

National Income

The total income earned by a nation's people and businesses, including salaries, profits, and investment income, within a specific period.

Net National Product

The total value of all goods and services produced by a country's residents in a year, minus depreciation.