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, 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 $300 million and invest only $100 million in equity in the acquisition. What weight should Templeton use in computing the WACC for this acquisition? The appropriate weight of debt, w d0 is ___%

To compute the weight of debt (w_d), we need to consider the proportion of debt in the company's capital structure. In this case, Templeton plans to borrow $300 million out of a total acquisition cost of $400 million.

The weight of debt (w_d) can be calculated as follows:
w_d = debt / (debt + equity)

Substituting the values, we have:
w_d = $300 million / ($300 million + $100 million)

Simplifying, we get:
w_d = 0.75 or 75%

Therefore, Templeton should use a weight of debt (w_d) of 75% when computing the weighted average cost of capital (WACC) for this acquisition.