Templeton extended care facilities is considering the acquisition of a chain of cemeteries for $380 million dollars. 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 current owners have no debt financing but Templeton plans to borrow $270 million and invest only $110 million in equity in the acquisition. What weights should Templeton use in computing the WACC for this acquisition?
The appropriate w d weight is ___ %
There is more to the question as I answer the question so I won’t be able to add that portion.
The next two questions are very lengthy so if I could just have somone let me know if they have the correct answer to this question I’d like to converse further for the rest of the questions. Thank you