Suppose the Risk-Free Interest Rate Is 4

question 91

Multiple Choice

Suppose the risk-free interest rate is 4%.If Nielson borrows $150 million today at this rate and uses the proceeds to pay an immediate cash dividend,then according to MM,the market value of its equity just alter the dividend is paid would be closest to:

• A) $0 million
• B) $150 million
• C) $250 million
• D) $400 million

---

Definitions:

Recognition

The identification of something as having been previously seen, heard, known, etc.

Three-Box Model

A model of memory that suggests information is processed through three stages: sensory memory, short-term (or working) memory, and long-term memory.

Short-Term Memory

The component of the memory system that holds a small amount of information for a brief period of time.

Priming

A psychological phenomenon where exposure to one stimulus influences the response to a subsequent stimulus, without conscious guidance or intention.