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Solventum Corporation (SOLV) — WACC Analysis

WACC Breakdown

Solventum Corporation (SOLV) has a weighted average cost of capital (WACC) of 6.9%. The cost of equity is 8.8%, derived from a beta of 0.77 and a risk-free rate of 5.2%. The after-tax cost of debt is 1.6%. The capital structure is 74.1% equity and 25.9% debt.

Interpretation

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

Investors can compare SOLV's WACC of 6.9% against industry peers to gauge its relative financing costs. A beta of 0.77 reflects the stock's volatility relative to the broader market.

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VALUATION

SOLV WACC: 6.93% for Solventum Corporation

Current inputs imply a 8.80% cost of equity and a 2.00% 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

Solventum Corporation Common Stock (SOLV) WACC Results
Weighted Average Cost of Capital
6.93%
Cost of Equity
8.80%
Risk-Free Rate5.22%
Beta0.77
Market Risk Premium4.23%
Cost of Debt
1.58%
Pre-Tax Cost of Debt2.00%
Tax Rate21.00%
Tax Shield0.42%
Capital Structure
Equity: 74.09%($14.52B)
Debt: 25.91%($5079.00M)
Equity Component
6.52%
74.09% × 8.80%
Debt Component
0.41%
25.91% × 1.58%

Solventum Corporation (SOLV) WACC in context

Solventum Corporation (SOLV) currently screens with an estimated WACC of 6.93%. That blends a 8.80% cost of equity, a 2.00% pre-tax cost of debt, and a 74.09% 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 SOLV WACC implies

A 6.93% discount rate screens as a relatively low discount rate, which usually supports higher DCF values.

How this page calculates SOLV

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 0.77 and equity accounts for 74.09% 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.