Question 1

What is Selective Insurance Group's WACC?

Accepted Answer

Selective Insurance Group (SIGI) has a Weighted Average Cost of Capital (WACC) of 6.75%. This is calculated using a Cost of Equity of 7.19% (via CAPM with a beta of 0.49) and a pre-tax Cost of Debt of 5.47%, with an equity weight of 84.79% in the capital structure.

Question 2

Is Selective Insurance Group's WACC high or low?

Accepted Answer

Selective Insurance Group's WACC of 6.75% 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 Selective Insurance Group's WACC calculated?

Accepted Answer

Selective Insurance Group's WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 7.19% is derived from the CAPM model using a beta of 0.49. The pre-tax Cost of Debt (Rd) is 5.47%. The capital structure is 84.79% equity and 15.21% debt.

Selective Insurance Group (SIGI) — WACC 分析

WACC 构成

解读

Selective Insurance Group（SIGI）WACC：6.75%

WACC计算器

Selective Insurance Group（SIGI） WACC 解读

SIGI 公司分析

SIGI DCF 估值

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