Overstock.com, Inc. $($Ticker OSTK$)$ is a U$.$S$.$ online retailer located in the state of Utah. OSTK is a publicly traded firm with a stock price of $$74$ USD and $43$ million shares outstanding. OSTK has debt outstanding for approximately $$58$ million USD. OSTK has $536$ million in cash, over $1,600$ employees and $$436$ million in equity $($book value$).$ OSTK $$s equity beta is estimated to be $4\mathrm{.}42.$ The risk$-$free rate is $4\%,$ the market risk premium is $5\%$ and the debt outstanding is risk free.

Assume that OSTK combines or merges itself with another company MarketWise $($MW$)$ that is: $(1)$ identical in size $($in market value terms$)$ to the Enterprise Value of OSTK but $(2)$ that has an unlevered asset beta of $1.$

Based on these assumptions, what is the expected WACC of the combined entity $($OSTK$+$MW$)?$

Overstock.com, Inc. $($Ticker OSTK$)$ is a U$.$S$.$ online retailer located in the state of Utah. OSTK is a publicly traded firm with a stock price of $$74$ USD and $43$ million shares outstanding. OSTK has debt outstanding for approximately $$58$ million USD. OSTK has $536$ million in cash, over $1,600$ employees and $$436$ million in equity $($book value$).$ OSTK $$s equity beta is estimated to be $4\mathrm{.}42.$ The risk$-$free rate is $4\%,$ the market risk premium is $5\%$ and the debt outstanding is risk free.

Assume that OSTK combines or merges itself with another company MarketWise $($MW$)$ that is: $(1)$ identical in size $($in market value terms$)$ to the Enterprise Value of OSTK but $(2)$ that has an unlevered asset beta of $1.$

Based on these assumptions, what is the expected WACC of the combined entity $($OSTK$+$MW$)?$

$22\mathrm{.}68\%$

$18\mathrm{.}11\%$

$27\mathrm{.}90\%$

$12\mathrm{.}45\%$

$23\mathrm{.}92\%$