Q2. A. Company N has no debt. Its assets will be worth $6 million in one year if the economy is strong, but only $3 million if the economy is weak. Both events are equally likely. The market value today of Company N assets is $4 million. (a) What is the expected return for Company N stock without leverage? (b) Suppose the risk-free interest rate is 4%. If Nielson borrows $1.5 million today at this rate and uses the proceeds to pay an immediate cash dividend, then according to Modigliani-Miller Proposition I and II without taxes, what is the expected return of Nielson's stock just after the dividend is paid?