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Arch Capital Group Ltd (ACGL) — WACC Analysis

WACC Breakdown

Arch Capital Group Ltd (ACGL) has a weighted average cost of capital (WACC) of 7.1%. The cost of equity is 7.7%, derived from a beta of 0.47 and a risk-free rate of 5.0%. The after-tax cost of debt is 2.9%. The capital structure is 88.6% equity and 11.4% debt.

Interpretation

A WACC of 7.1% suggests that the market views Arch Capital Group Ltd as relatively low-risk, with a lower cost of financing.

Investors can compare ACGL's WACC of 7.1% against industry peers to gauge its relative financing costs. A beta of 0.47 reflects the stock's volatility relative to the broader market.

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VALUATION

ACGL WACC: 7.15% for Arch Capital Group Ltd

Current inputs imply a 7.70% cost of equity and a 3.64% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

Arch Capital Group Ltd Common Stock (ACGL) WACC Results
Weighted Average Cost of Capital
7.15%
Cost of Equity
7.70%
Risk-Free Rate4.96%
Beta0.47
Market Risk Premium4.23%
Cost of Debt
2.88%
Pre-Tax Cost of Debt3.64%
Tax Rate21.00%
Tax Shield0.76%
Capital Structure
Equity: 88.63%($33.42B)
Debt: 11.37%($4286.00M)
Equity Component
6.82%
88.63% × 7.70%
Debt Component
0.33%
11.37% × 2.88%

Arch Capital Group Ltd (ACGL) WACC in context

Arch Capital Group Ltd (ACGL) currently screens with an estimated WACC of 7.15%. That blends a 7.70% cost of equity, a 3.64% pre-tax cost of debt, and a 88.63% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively low discount rate, which usually supports higher DCF values.

What ACGL WACC implies

A 7.15% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates ACGL

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.47 and equity accounts for 88.63% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.