Question
Templeton Extended Care Facilities, Inc. is considering the acquisition of a chain of cemeteries owned by the Rosewood Corporation for $410 million. Since the primary
Templeton Extended Care Facilities, Inc. is considering the acquisition of a chain of cemeteries owned by the Rosewood Corporation for
$410
million. Since the primary asset of this business is real estate, Templeton's management has determined that they will be able to borrow the majority of the money needed to buy the business. The Rosewood Corporation has no debt financing, but Templeton plans to borrow
$110
million and invest only
$300
million in equity in the acquisition. What weights should Templeton use for debt and equity in computing the WACC for this acquisition?
The appropriate weight of debt, , is enter your response here%. (Round to one decimal place.)
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