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

question 65

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.

-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 after the dividend is paid would be closest to:

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

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Definitions:

Employee Training

The process of teaching employees the skills and knowledge necessary for their current jobs and for their future professional development.

Controlling Accidents

The set of measures and protocols aimed at preventing and managing unintended events or mishaps, especially in the workplace.

Job Embeddedness

The extent to which an employee feels connected to their job and the community, influencing their likelihood to stay with the organization.

General Feeling

A broad, non-specific emotional state or attitude that an individual may have towards a particular idea or situation.