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.

1. The expected return for Neilson Motors stock without leverage and doesn't pay dividend is:
2. 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

Use the following information to answer the question(s) below. Nielson Molors (NM) has no debt. Its assets will be worth $600 miltion in ono year if the economy is strong, but only $300 million if the econcrny is weak. Both events are equally thety. The market valuo today of Niolson's assets is $400 milion. A) The expected retum for Neilson Motors stock without lewerage and doosn't pay dividend is B) Suppose the risk - free interest rate is 4%. If Nielson borrows $150 milion today at this rato 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