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.

---

Definitions:

Heterozygous Individual

A heterozygous individual possesses two different alleles of a gene for a particular trait, resulting in genetic variation.

Different Alleles

Variations or alternative forms of a gene that can exist at a single locus (position) on a chromosome.

Dominant Allele

An allele that expresses its phenotypic effect even when heterozygous with a recessive allele; it masks the effect of a recessive allele.

Heterozygous Individuals

Individuals having two different alleles at a particular genetic locus, one inherited from each parent.