AH.TO WACC - Weighted Average Cost of Capital

The WACC of Aleafia Health Inc (AH.TO) is 6.4%.

The Cost of Equity of Aleafia Health Inc (AH.TO) is 12.20%.

The Cost of Debt of Aleafia Health Inc (AH.TO) is 5.50%.

	Range	Selected
Cost of equity	9.70% - 14.70%	12.20%
Tax rate	1.40% - 1.70%	1.55%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.8% - 8.0%	6.4%

WACC

AH.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.29	1.73

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.70%	14.70%

Tax rate	1.40%	1.70%
Debt/Equity ratio	5.75	5.75
Cost of debt	4.00%	7.00%

After-tax WACC	4.8%	8.0%


Selected WACC	6.4%

AH.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 AH.TO:

cost_of_equity (12.20%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.29) + 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.