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Synopsys Inc (SNPS) — WACC Analysis

WACC Breakdown

Synopsys Inc (SNPS) has a weighted average cost of capital (WACC) of 8.5%. The cost of equity is 9.0%, derived from a beta of 1.00 and a risk-free rate of 4.7%. The after-tax cost of debt is 4.9%. The capital structure is 89.4% equity and 10.6% debt.

Interpretation

A WACC of 8.5% is moderate, reflecting the market's balanced risk assessment of Synopsys Inc.

Investors can compare SNPS's WACC of 8.5% against industry peers to gauge its relative financing costs. A beta of 1.00 reflects the stock's volatility relative to the broader market.

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VALUATION

SNPS WACC: 8.53% for Synopsys Inc

Current inputs imply a 8.96% cost of equity and a 6.22% 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

Synopsys Inc Common Stock (SNPS) WACC Results
Weighted Average Cost of Capital
8.53%
Cost of Equity
8.96%
Risk-Free Rate4.73%
Beta1.00
Market Risk Premium4.23%
Cost of Debt
4.91%
Pre-Tax Cost of Debt6.22%
Tax Rate21.00%
Tax Shield1.31%
Capital Structure
Equity: 89.42%($84.82B)
Debt: 10.58%($10.04B)
Equity Component
8.01%
89.42% × 8.96%
Debt Component
0.52%
10.58% × 4.91%

Synopsys Inc (SNPS) WACC in context

Synopsys Inc (SNPS) currently screens with an estimated WACC of 8.53%. That blends a 8.96% cost of equity, a 6.22% pre-tax cost of debt, and a 89.42% equity weight into the discount rate you would typically use in a DCF model.

falls into a common range for established public companies and is a practical DCF starting point.

What SNPS WACC implies

A 8.53% discount rate falls into a common range for established public companies and is a practical DCF starting point.

How this page calculates SNPS

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.00 and equity accounts for 89.42% 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.