CHAL.CN WACC - Weighted Average Cost of Capital

The WACC of Chalice Brands Ltd. (CHAL.CN) is 8.6%.

The Cost of Equity of Chalice Brands Ltd. (CHAL.CN) is 12.80%.

The Cost of Debt of Chalice Brands Ltd. (CHAL.CN) is 5.50%.

	Range	Selected
Cost of equity	9.10% - 16.50%	12.80%
Tax rate	1.30% - 2.20%	1.75%
Cost of debt	4.00% - 7.00%	5.50%
WACC	6.2% - 11.1%	8.6%

WACC

CHAL.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.16	2.02

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.10%	16.50%

Tax rate	1.30%	2.20%
Debt/Equity ratio	1.28	1.28
Cost of debt	4.00%	7.00%

After-tax WACC	6.2%	11.1%


Selected WACC	8.6%

CHAL.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 CHAL.CN:

cost_of_equity (12.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.16) + 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.