Company (A) is going to buy another company (B). We want to value the shares of B and so we will use three alternatives of the debt/equity structure so as to obtain WACC:

(1) present structure of A; (2) present structure of B and (3) structure used by A to finance the acquisition of Bs shares.

We will value the company B by applying these three alternatives and then take as a reference the average of these three results.

Is this approach correct? Explain your answer fully.