BU.TO
Burcon NutraScience Corp
Price:  
0.11 
CAD
Volume:  
3,500.00
Canada | Chemicals
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BU.TO WACC - Weighted Average Cost of Capital

The WACC of Burcon NutraScience Corp (BU.TO) is 8.6%.

The Cost of Equity of Burcon NutraScience Corp (BU.TO) is 6.80%.
The Cost of Debt of Burcon NutraScience Corp (BU.TO) is 20.80%.

Range Selected
Cost of equity 5.40% - 8.20% 6.80%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 7.00% - 34.60% 20.80%
WACC 5.4% - 11.8% 8.6%
WACC

BU.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.35 0.59
Additional risk adjustments 0.5% 1.0%
Cost of equity 5.40% 8.20%
Tax rate 25.90% 26.50%
Debt/Equity ratio 0.26 0.26
Cost of debt 7.00% 34.60%
After-tax WACC 5.4% 11.8%
Selected WACC 8.6%

BU.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 BU.TO:

cost_of_equity (6.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.35) + 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.