A Trade-Off Analysis of Stryker Corporation (SYK)

Kong Hoong Shern

Co-Presenters: Individual Presentation

College: College of Business and Public Management

Major: BS.FINANCE

Faculty Research Mentor: Andreas Kakolyris  

Abstract:

This research analyzes Stryker Corporation (SYK) to identify an optimal capital structure that minimizes the Weighted Average Cost of Capital (WACC) and maximizes total firm value. Utilizing a zero-growth perpetuity model and the Hamada Equation, the study adjusted the firm's unlevered beta of 0.629 to evaluate various debt-to-capital intervals. Based on financial data from November 1, 2025, the simulation determined that the optimal capital structure is achieved at a 10% debt ratio. This results in a minimum WACC of 10.81%, which ensures the highest possible valuation for the company under current market conditions.