ACB.TO WACC - Weighted Average Cost of Capital

The WACC of Aurora Cannabis Inc (ACB.TO) is 8.8%.

The Cost of Equity of Aurora Cannabis Inc (ACB.TO) is 9.50%.

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

	Range	Selected
Cost of equity	8.10% - 10.90%	9.50%
Tax rate	0.90% - 3.60%	2.25%
Cost of debt	6.60% - 7.00%	6.80%
WACC	7.7% - 9.9%	8.8%

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	0.97	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.10%	10.90%

Tax rate	0.90%	3.60%
Debt/Equity ratio	0.3	0.3
Cost of debt	6.60%	7.00%

After-tax WACC	7.7%	9.9%


Selected WACC	8.8%

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 (9.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.97) + 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.