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).

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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?