Question 1

What is The Travelers Companies, Inc.'s WACC?

Accepted Answer

The Travelers Companies, Inc. (TRV) has a Weighted Average Cost of Capital (WACC) of 7.57%. This is calculated using a Cost of Equity of 7.08% (via CAPM with a beta of 0.48) and a pre-tax Cost of Debt of 141.67%, with an equity weight of 99.53% in the capital structure.

Question 2

Is The Travelers Companies, Inc.'s WACC high or low?

Accepted Answer

The Travelers Companies, Inc.'s WACC of 7.57% 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 The Travelers Companies, Inc.'s WACC calculated?

Accepted Answer

The Travelers Companies, Inc.'s WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 7.08% is derived from the CAPM model using a beta of 0.48. The pre-tax Cost of Debt (Rd) is 141.67%. The capital structure is 99.53% equity and 0.47% debt.

The Travelers Companies, Inc. (TRV) — WACC 分析

WACC 构成

解读

The Travelers Companies, Inc.（TRV）WACC：7.57%

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The Travelers Companies, Inc.（TRV） WACC 解读

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