The WACC of Acreage Holdings Inc (ACRG.A.U.CN) is 14.6%.
Range | Selected | |
Cost of equity | 600.20% - 930.40% | 765.30% |
Tax rate | 5.60% - 16.70% | 11.15% |
Cost of debt | 7.00% - 24.70% | 15.85% |
WACC | 7.4% - 21.8% | 14.6% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 117.07 | 151.84 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 600.20% | 930.40% |
Tax rate | 5.60% | 16.70% |
Debt/Equity ratio | 744.16 | 744.16 |
Cost of debt | 7.00% | 24.70% |
After-tax WACC | 7.4% | 21.8% |
Selected WACC | 14.6% | |
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 ACRG.A.U.CN:
cost_of_equity (765.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (117.07) + 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.