BKUH WACC - Weighted Average Cost of Capital
The WACC of Bakhu Holdings Corp (BKUH) is 7.4%.
| Range | Selected | |
| Cost of equity | 10.7% - 15.0% | 12.85% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.5% - 8.2% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.49 | 1.81 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 10.7% | 15.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.49 | 1.49 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.5% | 8.2% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BKUH | Bakhu Holdings Corp | 1.49 | -0.44 | -0.21 |
| ACB.TO | Aurora Cannabis Inc | 0.31 | 1.58 | 1.29 |
| ARVN | Arvinas Inc | 0 | 1.38 | 1.38 |
| AXSM | Axsome Therapeutics Inc | 0.04 | 0.99 | 0.97 |
| CORC | Cornwall Resources Inc | 0.09 | 0 | 0 |
| HRMY | Harmony Biosciences Holdings Inc | 0.1 | 1.17 | 1.09 |
| OCUL | Ocular Therapeutix Inc | 0.04 | 1.57 | 1.52 |
| RVNC | Revance Therapeutics Inc | 1.13 | 1.14 | 0.62 |
| SNDL | Sundial Growers Inc | 0.34 | 0.5 | 0.4 |
| VIN.CN | Vinergy Capital Inc | 0.02 | 1.06 | 1.05 |
| Low | High | |
| Unlevered beta | 0.83 | 1.07 |
| Relevered beta | 1.73 | 2.21 |
| Adjusted relevered beta | 1.49 | 1.81 |
BKUH'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 BKUH:
cost_of_equity (12.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (1.49) + 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.