What are the potential reasons why TSR over short periods may not reflect a company's actual performance and its management? Find one undervalued stock and overvalued stock from the current market and explain why they are over/undervalued?

Suppose Company A plans to acquire a competitor, Company T, by issuing debt to fund the acquisition. If Company A's cost of debt is 4% and its cost o capital is 8%, what is the approximate discount rate to use in valuing the cash flows expected from the acquisition?