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Otis Worldwide Corporation (OTIS) — WACC Analysis

WACC Breakdown

Otis Worldwide Corporation (OTIS) has a weighted average cost of capital (WACC) of 6.9%. The cost of equity is 8.1%, derived from a beta of 0.69 and a risk-free rate of 4.7%. The after-tax cost of debt is 2.5%. The capital structure is 78.9% equity and 21.1% debt.

Interpretation

A WACC of 6.9% suggests that the market views Otis Worldwide Corporation as relatively low-risk, with a lower cost of financing.

Investors can compare OTIS's WACC of 6.9% against industry peers to gauge its relative financing costs. A beta of 0.69 reflects the stock's volatility relative to the broader market.

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VALUATION

OTIS WACC: 6.91% for Otis Worldwide Corporation

Current inputs imply a 8.09% cost of equity and a 3.17% 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

Otis Worldwide Corporation Common Stock (OTIS) WACC Results
Weighted Average Cost of Capital
6.91%
Cost of Equity
8.09%
Risk-Free Rate4.73%
Beta0.69
Market Risk Premium4.23%
Cost of Debt
2.50%
Pre-Tax Cost of Debt3.17%
Tax Rate21.00%
Tax Shield0.67%
Capital Structure
Equity: 78.87%($27.08B)
Debt: 21.13%($7256.00M)
Equity Component
6.38%
78.87% × 8.09%
Debt Component
0.53%
21.13% × 2.50%

Otis Worldwide Corporation (OTIS) WACC in context

Otis Worldwide Corporation (OTIS) currently screens with an estimated WACC of 6.91%. That blends a 8.09% cost of equity, a 3.17% pre-tax cost of debt, and a 78.87% 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 OTIS WACC implies

A 6.91% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates OTIS

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.69 and equity accounts for 78.87% 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.