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December 18, 2014

Homework Help: finance

Posted by Jay on Tuesday, January 3, 2012 at 10:00am.

141. (Defining capital structure weights) Templeton Extended Care Facilities, Inc. is considering the acquisition of a chain of cemeteries for $400 million. Since the primary
asset of this business is real estate, Templetons 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 $300 million and invest only $100 million in equity in the acquisition. What weights should Templeton use in computing the WACC for this acquisition?

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