Question 1

What is Two Harbors Investment Corp.'s WACC?

Accepted Answer

Two Harbors Investment Corp. (TWO) has a Weighted Average Cost of Capital (WACC) of 5.86%. This is calculated using a Cost of Equity of 8.32% (via CAPM with a beta of 0.86) and a pre-tax Cost of Debt of 5.48%, with an equity weight of 13.43% in the capital structure.

Question 2

Is Two Harbors Investment Corp.'s WACC high or low?

Accepted Answer

Two Harbors Investment Corp.'s WACC of 5.86% 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 Two Harbors Investment Corp.'s WACC calculated?

Accepted Answer

Two Harbors Investment Corp.'s WACC is calculated using the formula: WACC = (E/V × Re) + (D/V × Rd × (1-T)). The Cost of Equity (Re) of 8.32% is derived from the CAPM model using a beta of 0.86. The pre-tax Cost of Debt (Rd) is 5.48%. The capital structure is 13.43% equity and 86.57% debt.

Two Harbors Investment Corp. (TWO) — WACC 分析

WACC 构成

解读

Two Harbors Investment Corp.（TWO）WACC：5.86%

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Two Harbors Investment Corp.（TWO） WACC 解读

TWO 公司分析

TWO DCF 估值

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