BU.TO
Burcon NutraScience Corp
Price:  
2.96 
CAD
Volume:  
22,775.00
Canada | Chemicals
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BU.TO WACC - Weighted Average Cost of Capital

The WACC of Burcon NutraScience Corp (BU.TO) is 7.3%.

The Cost of Equity of Burcon NutraScience Corp (BU.TO) is 6.15%.
The Cost of Debt of Burcon NutraScience Corp (BU.TO) is 19.85%.

Range Selected
Cost of equity 5.10% - 7.20% 6.15%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 7.00% - 32.70% 19.85%
WACC 5.1% - 9.5% 7.3%
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 0.37 0.5
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.10% 7.20%
Tax rate 25.90% 26.50%
Debt/Equity ratio 0.15 0.15
Cost of debt 7.00% 32.70%
After-tax WACC 5.1% 9.5%
Selected WACC 7.3%

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 (6.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.37) + 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.