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What unleveraged discount rate will used to value pulpless

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Question - Mondo Cult is considering acquiring pulpless. Pulpless is currently financed with 0.24% debt at an interest rate of 0.13%. If the acquisition takes place the debt level will continue at the 0.24% target level and the interest rate will remain the same. Pulpless's pre-merger beta is 1.5, and its tax rate is 0.39%. The risk-free rate is 0.04% and the market risk premium is 0.03%. What unleveraged discount rate will be used to value pulpless?

Reference no: EM132446467

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