Question 1

What is Cincinnati Financial Corp's WACC?

Accepted Answer

Cincinnati Financial Corp (CINF) has a Weighted Average Cost of Capital (WACC) of 7.80%. This is calculated using a Cost of Equity of 7.90% (via CAPM with a beta of 0.72) and a pre-tax Cost of Debt of 6.17%, with an equity weight of 96.60% in the capital structure.

Question 2

Is Cincinnati Financial Corp's WACC high or low?

Accepted Answer

Cincinnati Financial Corp's WACC of 7.80% is below the typical range of 8-12% for most companies, indicating relatively low cost of capital and lower risk. WACC is used as the discount rate in DCF valuations — a lower WACC results in higher present values of future cash flows.

Question 3

How is Cincinnati Financial Corp's WACC calculated?

Accepted Answer

Cincinnati Financial Corp's WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 7.90% is derived from the CAPM model using a beta of 0.72. The pre-tax Cost of Debt (Rd) is 6.17%. The capital structure is 96.60% equity and 3.40% debt.

Cincinnati Financial Corp (CINF) — WACC 分析

WACC 构成

解读

Cincinnati Financial Corp（CINF）WACC：7.80%

WACC计算器

Cincinnati Financial Corp（CINF） WACC 解读

CINF 公司分析

CINF DCF 估值

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