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Question 7 (1 point) Mondo Cult is considering acquiring pulpless.com. Pulpless is currently financed with 0.48% debt at an interest rate of 0.12%. If the
Question 7 (1 point) Mondo Cult is considering acquiring pulpless.com. Pulpless is currently financed with 0.48% debt at an interest rate of 0.12%. If the acquisition takes place the debt level will continue at the 0.48% target level and the interest rate will remain the same. Pulpless's pre-merger beta is 0.9, and its tax rate is 0.31%. The risk-free rate is 0.03% and the market risk premium is 0.02%. What unleveraged discount rate will be used to value pulpless.com? Your Answer: Answer Question 8 (1 point) Mondo Cult is considering acquiring pulpless.com. Pulpless is currently financed with 0.5% debt at an interest rate of [rd]%. If the acquisition takes place the debt level will continue at the 0.5% target level and the interest rate will remain the same. Pulpless's pre-merger beta is 1.3, and its tax rate is 0.2%. The risk-free rate is 0.04% and the market risk premium is 0.03%. What is the appropriate leveraged discount rate to value pulpless.com
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