Templeton Extended Care Facilities, Inc. is considering the acquisition of a chain of cemeteries for $400 million. Because the primary

Question

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 weights should Templeton
use in computing the WACC for this acquisition