ACB.TO
Aurora Cannabis Inc
Price:  
7.40 
CAD
Volume:  
356,980.00
Canada | Pharmaceuticals
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ACB.TO WACC - Weighted Average Cost of Capital

The WACC of Aurora Cannabis Inc (ACB.TO) is 8.4%.

The Cost of Equity of Aurora Cannabis Inc (ACB.TO) is 8.85%.
The Cost of Debt of Aurora Cannabis Inc (ACB.TO) is 6.80%.

Range Selected
Cost of equity 6.90% - 10.80% 8.85%
Tax rate 0.90% - 3.60% 2.25%
Cost of debt 6.60% - 7.00% 6.80%
WACC 6.9% - 10.0% 8.4%
WACC

ACB.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.74 1.09
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.90% 10.80%
Tax rate 0.90% 3.60%
Debt/Equity ratio 0.25 0.25
Cost of debt 6.60% 7.00%
After-tax WACC 6.9% 10.0%
Selected WACC 8.4%

ACB.TO's CAPM model and how its cost of Equity is calculated

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 ACB.TO:

cost_of_equity (8.85%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.74) + 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.