BETR.CN
BetterLife Pharma Inc
Price:  
0.11 
CAD
Volume:  
60,920
Canada | Pharmaceuticals

BETR.CN WACC - Weighted Average Cost of Capital

The WACC of BetterLife Pharma Inc (BETR.CN) is 5.6%.

The Cost of Equity of BetterLife Pharma Inc (BETR.CN) is 5.75%.
The Cost of Debt of BetterLife Pharma Inc (BETR.CN) is 5%.

RangeSelected
Cost of equity4.8% - 6.7%5.75%
Tax rate25.9% - 26.5%26.2%
Cost of debt5.0% - 5.0%5%
WACC4.7% - 6.5%5.6%
WACC

BETR.CN WACC calculation

CategoryLowHigh
Long-term bond rate3.2%3.7%
Equity market risk premium5.1%6.1%
Adjusted beta0.320.41
Additional risk adjustments0.0%0.5%
Cost of equity4.8%6.7%
Tax rate25.9%26.5%
Debt/Equity ratio
0.060.06
Cost of debt5.0%5.0%
After-tax WACC4.7%6.5%
Selected WACC5.6%

BETR.CN'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 BETR.CN:

cost_of_equity (5.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.32) + 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.