BUDZ WACC - Weighted Average Cost of Capital
The WACC of Weed Inc (BUDZ) is 8.3%.
| Range | Selected | |
| Cost of equity | 7.1% - 10.6% | 8.85% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.8% - 9.9% | 8.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.7 | 1.02 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 7.1% | 10.6% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.1 | 0.1 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.8% | 9.9% |
| Selected WACC | 8.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| BUDZ | Weed Inc | 0.1 | -0.36 | -0.34 |
| AVCN.TO | Avicanna Inc | 0.06 | 2.01 | 1.93 |
| AXIM | Axim Biotechnologies Inc | 2.61 | 0.3 | 0.1 |
| LQDA | Liquidia Corp | 0.07 | 1.48 | 1.41 |
| NBRV | Nabriva Therapeutics PLC | 1.15 | 1.64 | 0.89 |
| NBY | NovaBay Pharmaceuticals Inc | 0.16 | 1.65 | 1.48 |
| NLSP | NLS Pharmaceutics AG | 0.41 | 0 | 0 |
| NUMI.V | Numinus Wellness Inc | 0 | 1.05 | 1.05 |
| OTIC | Otonomy Inc | 2.47 | 1.53 | 0.55 |
| PRTT | Protect Pharmaceutical Corp | 0 | 0.45 | 0.45 |
| Low | High | |
| Unlevered beta | 0.51 | 0.95 |
| Relevered beta | 0.55 | 1.03 |
| Adjusted relevered beta | 0.7 | 1.02 |
BUDZ'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 BUDZ:
cost_of_equity (8.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.7) + 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.