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

question 32

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. )
-The total debt overhang associated with accepting project 4 is closest to:

• A)$0 million.
• B)$13.5 million.
• C)$15.0 million.
• D)$38.6 million.

---

Definitions:

Drive-Reduction Theory

A psychological concept proposing that the motivation of behavior is the reduction of drives, which are primarily biological needs that trigger arousal.

Aroused State

A condition of heightened physiological and psychological activity, with increased heart rate, alertness, and energy, often triggered by excitement or stress.

Unlearned Behavior

Innate actions or reactions not influenced by conditioning or learning; instinctive behavior.

Homeostatic Mechanism

Biological processes that maintain stability and equilibrium within an organism's internal environment.