It is unimportant whether the acquirer uses the target's or its own weighted average cost of capital when valuing the target firm.

Question

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The choice between using the target's or the acquirer's weighted average cost of capital (WACC) can significantly impact the valuation of the target firm. The acquirer's WACC may reflect its own risk profile and cost of capital, while the target's WACC may reflect its specific operations, assets, and liabilities. Therefore, it is important to carefully consider which WACC to use when valuing a target firm.

It Is Unimportant Whether the Acquirer Uses the Target's or Its