The WACC of BetterLife Pharma Inc (BETR.CN) is 5.6%.
Range | Selected | |
Cost of equity | 4.8% - 6.7% | 5.75% |
Tax rate | 25.9% - 26.5% | 26.2% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 4.7% - 6.5% | 5.6% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.32 | 0.41 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 4.8% | 6.7% |
Tax rate | 25.9% | 26.5% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 4.7% | 6.5% |
Selected WACC | 5.6% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
BETR.CN | BetterLife Pharma Inc | 0.06 | -0.16 | -0.15 |
ACER | Acer Therapeutics Inc | 0.72 | 0.43 | 0.28 |
AVCN.TO | Avicanna Inc | 0.06 | 2.01 | 1.92 |
CNBX | Cannabics Pharmaceuticals Inc | 256.97 | 0.32 | 0 |
EARS | Auris Medical Holding Ltd | 0.01 | 1.42 | 1.4 |
EYEG | EyeGate Pharmaceuticals Inc | 0.01 | 0.77 | 0.76 |
NGEN.V | NervGen Pharma Corp | 0 | -0.41 | -0.41 |
NLSP | NLS Pharmaceutics AG | 0.41 | 0 | 0 |
PHBI | Pharmagreen Biotech Inc | 0.45 | -0.12 | -0.09 |
TRVI | Trevi Therapeutics Inc | 0 | -0.02 | -0.02 |
Low | High | |
Unlevered beta | -0.01 | 0.11 |
Relevered beta | -0.01 | 0.12 |
Adjusted relevered beta | 0.32 | 0.41 |
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.