What is the main advantage of the divisional cost of capital approach over the WACC approach?

by Osman
Words: 90
Pages: 1
Subject: Management
Topics: APA format, Assignment help, Homework help, WACC

Management

FINC610 Week 3 Capital Structure and Debt

  1. http://www.nyse.com
  2. Research the top listing and continuation requirements mandated by the NYSE.
  3. Then, complete the following, and submit your individual assignment:
    • Currently, GII’s capital structure is 75% equity based and 25% debt based. GII is in the 25% marginal tax bracket in France and has a cost of equity of 18% and an average debt cost of 7%. Calculate GII’s weighted average cost of capital (WACC).
    • What is the main advantage of the divisional cost of capital approach over the WACC approach?