Question: ( Defining capital structure weights ) Templeton Extended Care Facilities, Inc. is considering the acquisition of a chain of cemeteries owned by the Rosewood Corporation
Defining capital structure weights Templeton Extended Care Facilities, Inc. is considering the acquisition of a chain of cemeteries owned by the Rosewood Corporation for $ 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 $ million and invest only $ 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 Round to one decimal place.
The appropriate weight of common equity, is Round to one decimal place.
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