CUB.V WACC - Weighted Average Cost of Capital

The WACC of CubicFarm Systems Corp (CUB.V) is 8.0%.

The Cost of Equity of CubicFarm Systems Corp (CUB.V) is 6.25%.

The Cost of Debt of CubicFarm Systems Corp (CUB.V) is 8.60%.

	Range	Selected
Cost of equity	5.60% - 6.90%	6.25%
Tax rate	0.80% - 1.70%	1.25%
Cost of debt	7.00% - 10.20%	8.60%
WACC	6.6% - 9.3%	8.0%

WACC

CUB.V WACC calculation

Category	Low	High

Long-term bond rate	3.9%	4.4%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.33	0.34

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.60%	6.90%

Tax rate	0.80%	1.70%
Debt/Equity ratio	3.46	3.46
Cost of debt	7.00%	10.20%

After-tax WACC	6.6%	9.3%


Selected WACC	8.0%

CUB.V'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 CUB.V:

cost_of_equity (6.25%) = risk_free_rate (4.15%) + equity_risk_premium (5.60%) * adjusted_beta (0.33) + 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.