CANN.CN WACC - Weighted Average Cost of Capital

The WACC of Heritage Cannabis Holdings Corp (CANN.CN) is 92.3%.

The Cost of Equity of Heritage Cannabis Holdings Corp (CANN.CN) is 6.65%.

The Cost of Debt of Heritage Cannabis Holdings Corp (CANN.CN) is 157.20%.

	Range	Selected
Cost of equity	5.50% - 7.80%	6.65%
Tax rate	8.30% - 10.60%	9.45%
Cost of debt	7.00% - 307.40%	157.20%
WACC	6.1% - 178.4%	92.3%

WACC

CANN.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.46	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.50%	7.80%

Tax rate	8.30%	10.60%
Debt/Equity ratio	1.77	1.77
Cost of debt	7.00%	307.40%

After-tax WACC	6.1%	178.4%


Selected WACC	92.3%

CANN.CN'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 CANN.CN:

cost_of_equity (6.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.46) + 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.