The appropriate discount rate in merger analysis is:
A)the acquirer's cost of capital because a merger is essentially a capital budgeting project.
B)the acquirer's cost of equity because mergers are risky and a rate above the cost of capital is appropriate.
C)the target's cost of equity because it best approximates the usually high risk inherent in this type of equity transaction.
D)a judgmental rate reflecting the risk inherent in the transaction.

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The Answer of The appropriate discount rate in merger analysis is:
A)the acquirer's cost of capital because a merger is essentially a capital budgeting project.
B)the acquirer's cost of equity because mergers are risky and a rate above the cost of capital is appropriate.
C)the target's cost of equity because it best approximates the usually high risk inherent in this type of equity transaction.
D)a judgmental rate reflecting the risk inherent in the transaction.

The Appropriate Discount Rate in Merger Analysis Is