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

question 106

Multiple Choice

Use the following information to answer the question(s) below.
If managed effectively,Rearden Metal will have assets with a market value of $200 million,$300 million,or $400 million next year,with each outcome being equally likely.Managers,however,may decide to engage in wasteful empire building,which will reduce Rearden's market value by $20 million in all cases.Managers may also increase the risk of the firm,changing the probability of each outcome to 50%,5%,and 45% respectively.
-Suppose that the managers at Rearden Metal will increase risk to maximize the expected payoff to equity holders.If Rearden has $230 million in debt due in one year,then the expected value of Rearden's assets is closest to:

• A)$280 million.
• B)$295 million.
• C)$300 million.
• D)$900 million.

Understand the effectiveness and techniques of paraphrasing in communication.

Identify situations where messages containing threats can be strategically used.

Explore techniques to establish and communicate expertise.

Determine factors influencing the credibility and believability of a communicator.

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Definitions:

Weak Ego

A condition characterized by a lack of self-esteem and inability to cope with demands, leading to poor decision-making.

Strong Id

A term that might refer to an individual with a dominant id according to Freudian psychology, characterized by impulsive and unconscious desires.

Oedipus Complex

A Freudian theory positing that a child experiences unconscious desires for their opposite-sex parent and jealousy and rivalry toward their same-sex parent.

Oral Fixation

A psychological condition first described by Freud, characterized by an obsession with engaging the mouth in activities such as eating, talking, or smoking.