Question: RiverRocks ( whose WACC is 1 1 . 3 % ) is considering an acquisition of Raft Adventures ( whose WACC is 1 5 .

RiverRocks (whose WACC is11.3%) is considering an acquisition of Raft Adventures (whose WACC is 15.2%). What is the appropriate discount rate for RiverRocks to use to evaluate theacquisition? Why?

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