How do you calculate WACC for a cross-border M&A target (e.g. a European acquirer buying a US target)?

Whose WACC do you use — acquirer or target? Answer: the target WACC is the valuation benchmark because it reflects the risk of the cash flows (location, industry, business). Use the acquirer WACC only when synergy NPV is valued separately. Target-specific: USD cost of capital (US Treasury Rf, US ERP, US comps for beta). The valuation is then converted into the home currency at spot FX. Pitfall: if the acquirer values with its own lower WACC ('because we can finance more cheaply'), it pays full value plus a premium and gives its cost-of-capital advantage away to the seller.