Your firm has a beta of 2.2 and just paid a dividend of $2 that is expected to grow at 8%. You are considering an acquisition that would lower your beta to 1.8 and your growth rate to 6.5%. If the risk-free rate is 2% and the market risk premium is 5.5%, should you undertake the acquisition?

For the previous question, what would be the lowest post-acquisition growth rate, given the new beta of 1.8, that would make the acquisition feasible? The previous question was: Your firm has a beta of 2.2 and just paid a dividend of $2 that is expected to grow at 8%. You are considering an acquisition that would lower your beta to 1.8 and your growth rate to 6.5%. If the risk-free rate is 2% and the market risk premium is 5.5%, should you undertake the acquisition?