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Greg care facilities considering the acquisition of a chain of cemeteries for 38

ID: 2692407 • Letter: G

Question

Greg care facilities considering the acquisition of a chain of cemeteries for 380 million.since the primary asset of this business is real estate, Greg management has determined that they will be able to borrow the majority of the money needed to buy the businessmen current owners have no debt financing but Greg plans to borrow $290 million and invest only 90 million in equity in the acquisition. What weights should greg use in computing the WACC for the acquisition? the appropriate w/cs weight is _____%(round to one decimal place)

Explanation / Answer

Weight of debt =(260/360) = 72.2% Weight of Equity= (100/360)= 27.8%

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