Answered: RiverRocks (whose WACC is 12.5%) is… | bartleby

SWFT Essntl Tax Individ/Bus Entities 2020

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter5: Business Deductions

Section: Chapter Questions

Problem 49P

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Question

RiverRocks (whose WACC is 12.5%) is considering an acquisition of Raft Adventures (whose WACC is 15.9%). What
is the appropriate discount rate for RiverRocks to use to evaluate the acquisition? Why?
The appropriate discount rate for RiverRocks to use to evaluate the acquisition is %. (Round to one
decimal place.)

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