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Johnson Enterprises is a food distribution service company that has a corporate beta =0.65 and an WACC = 8.5%. It is considering the acquisition of

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Johnson Enterprises is a food distribution service company that has a corporate beta =0.65 and an WACC = 8.5%. It is considering the acquisition of a web-based restaurant rating business that has a corporate beta = 1.20 and a higher debt ratio. In When evaluating the acquisition, Johnson should use a: WACC that cannot be determined given insufficient data WACC that is the same as Johnson's WACC that is average of Johnson's and target's WACCs (D) WACC that is higher than Johnson's after adjusting for the higher risk of target's equity WACC that is lower than Johnson's after adjusting for the higher amount of target's debt

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