AVCN.TO
Avicanna Inc
Price:  
0.24 
CAD
Volume:  
157,910.00
Canada | Pharmaceuticals
Valuation
Overview
Financials
Forecast
Compare
Historical Price
SolvencyDividends
Transactions
People

AVCN.TO WACC - Weighted Average Cost of Capital

The WACC of Avicanna Inc (AVCN.TO) is 6.0%.

The Cost of Equity of Avicanna Inc (AVCN.TO) is 6.05%.
The Cost of Debt of Avicanna Inc (AVCN.TO) is 5.00%.

Range Selected
Cost of equity 5.30% - 6.80% 6.05%
Tax rate -% - 1.80% 0.90%
Cost of debt 5.00% - 5.00% 5.00%
WACC 5.3% - 6.7% 6.0%
WACC

AVCN.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.32 0.35
Additional risk adjustments 0.5% 1.0%
Cost of equity 5.30% 6.80%
Tax rate -% 1.80%
Debt/Equity ratio 0.07 0.07
Cost of debt 5.00% 5.00%
After-tax WACC 5.3% 6.7%
Selected WACC 6.0%

AVCN.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 AVCN.TO:

cost_of_equity (6.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.32) + risk_adjustments (0.75%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.