The WACC of Ascend Wellness Holdings Inc (AAWH.U.CN) is 20.6%.
Range | Selected | |
Cost of equity | 63.10% - 75.90% | 69.50% |
Tax rate | 25.90% - 26.50% | 26.20% |
Cost of debt | 8.70% - 23.20% | 15.95% |
WACC | 15.1% - 26.1% | 20.6% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 11.76 | 11.76 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 63.10% | 75.90% |
Tax rate | 25.90% | 26.50% |
Debt/Equity ratio | 5.5 | 5.5 |
Cost of debt | 8.70% | 23.20% |
After-tax WACC | 15.1% | 26.1% |
Selected WACC | 20.6% | |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for AAWH.U.CN:
cost_of_equity (69.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (11.76) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.