The WACC of Americann Inc (ACAN) is 7.6%.
Range | Selected | |
Cost of equity | 444.9% - 3080.0% | 1762.45% |
Tax rate | 26.2% - 27.0% | 26.6% |
Cost of debt | 7.0% - 11.3% | 9.15% |
WACC | 5.4% - 9.8% | 7.6% |
Category | Low | High |
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 95.88 | 549.13 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 444.9% | 3080.0% |
Tax rate | 26.2% | 27.0% |
Debt/Equity ratio | 2083.5 | 2083.5 |
Cost of debt | 7.0% | 11.3% |
After-tax WACC | 5.4% | 9.8% |
Selected WACC | 7.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
ACAN | Americann Inc | 2083.5 | -1.22 | 0 |
BETR.CN | BetterLife Pharma Inc | 0.06 | 0.11 | 0.1 |
BVXV | BiondVax Pharmaceuticals Ltd | 1.06 | 1.83 | 1.03 |
EYEG | EyeGate Pharmaceuticals Inc | 0.01 | 0.77 | 0.76 |
JTBK | Jetblack Corp | 0.01 | 0.91 | 0.91 |
OILS.CN | Nextleaf Solutions Ltd | 0.03 | 1.89 | 1.84 |
PVCT | Provectus Biopharmaceuticals Inc | 0.1 | 0.09 | 0.08 |
SUGR.V | SugarBud Craft Growers Corp | 1.1 | 0.71 | 0.39 |
THC.CN | THC Biomed Intl Ltd | 2.74 | -0.29 | -0.1 |
Low | High | |
Unlevered beta | 0.16 | 0.69 |
Relevered beta | 142.61 | 819.1 |
Adjusted relevered beta | 95.88 | 549.13 |
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 ACAN:
cost_of_equity (1,762.45%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (95.88) + 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.