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

question 74

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 1 is closest to:

• A)$0 million.
• B)$12.5 million.
• C)$14.4 million.
• D)$22.5 million.

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Definitions:

Vault

An architectural term, a vault is an arched form used to provide a space with a ceiling or roof, constructed in various shapes such as barrel, groin, or rib vaults.

Nasrids

The last Muslim dynasty in Spain, ruling the Emirate of Granada from the 13th to the 15th century until the Reconquista.

Dome of Heaven

An architectural and cosmological concept representing the sky dome or the heavens as a dome-shaped structure, often symbolizing the universe.

Hypostyle Prayer Hall

A large room filled with rows of columns that support the roof, commonly found in mosques and representing a key element in Islamic architecture.