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

question 47

Multiple Choice

Use the following information to answer the question(s) below.

Nielson Motors (NM) has no debt. Its assets will be worth $600 million in one year if the economy is strong, but only $300 million if the economy is weak. Both events are equally likely. The market value today of Nielson's assets is $400 million.

-The expected return for Nielson Motors stock without leverage is closest to:

• A)-25.0%.
• B)-17.5%.
• C)-12.5%.
• D)12.5%.

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Definitions:

Cytosine

A nitrogenous pyrimidine base that is a component of nucleic acids.

Thymine

A pyrimidine base found in DNA, paired with adenine in the DNA double helix.

DNA Encoding

The process by which genetic information is represented in the DNA using the sequence of four nucleotides (adenine, thymine, cytosine, and guanine) to instruct the development and functioning of organisms.

Nucleotide Sequence

The precise linear order of nucleotides in a DNA or RNA molecule, which encodes the genetic information of an organism.