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Use the Information for the Question(s)below

question 64

Multiple Choice

Use the information for the question(s) below.
Monsters Incorporated (MI) is ready to launch a new product.Depending upon the success of this product,MI will have a value of either $100 million,$150 million,or $191 million,with each outcome being equally likely.The cash flows are unrelated to the state of the economy (i.e.risk from the project is diversifiable) so that the project has a beta of 0 and a cost of capital equal to the risk-free rate,which is currently 5%.Assume that the capital markets are perfect.
-Assume that in the event of default,20% of the value of MI's assets will be lost in bankruptcy costs.Suppose that at the start of the year,MI has no debt outstanding,but has 5.6 million shares of stock outstanding.If MI does not issue debt,its share price is closest to:

Definitions:

High Impact

Actions, decisions, or events that have a significant effect or influence on a situation.

Emergency Response Protocols

Predefined plans and procedures activated in response to emergencies, aimed at mitigating risks and protecting assets, including people and property.

RETHINK Shinola

A conceptual call to reevaluate the Shinola brand, possibly suggesting a strategic shift or reassessment of its market positioning or identity.

Critique

The practice of systematically analyzing, assessing, or evaluating something, often to identify its limitations or to suggest improvements.