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8 Mondo Cult is considering acquiring pulpless.com. Pulpless is currently financed with 0.4% debt at an interest rate of {rd}%. If the acquisition takes place
8 Mondo Cult is considering acquiring pulpless.com. Pulpless is currently financed with 0.4% debt at an interest rate of {rd}%. If the acquisition takes place the debt level will continue at the 0.4% target level and the interest rate will remain the same. Pulpless's pre-merger beta is 1.4, and its tax rate is 0.2%. The risk-free rate is 0.05% and the market risk premium is 0.05%. What is the appropriate leveraged discount rate to value pulpless.com?
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