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:

Accounts Receivable

Represents the money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Ethnolinguistic Vitality

The degree to which a cultural or ethnic group is able to maintain and use its language and culture in the presence of other dominant groups.

Immigrants

Individuals who move from one country to another with the intention of settling in the new country.

Tribal Cultures

Societies organized into tribes, featuring strong communal bonds, traditions, and often distinct languages or cultural practices.