CUB.V
CubicFarm Systems Corp
Price:  
0.21 
CAD
Volume:  
4,500.00
Canada | Food Products
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CUB.V WACC - Weighted Average Cost of Capital

The WACC of CubicFarm Systems Corp (CUB.V) is 7.7%.

The Cost of Equity of CubicFarm Systems Corp (CUB.V) is 6.30%.
The Cost of Debt of CubicFarm Systems Corp (CUB.V) is 8.60%.

Range Selected
Cost of equity 5.60% - 7.00% 6.30%
Tax rate 0.80% - 1.70% 1.25%
Cost of debt 7.00% - 10.20% 8.60%
WACC 6.5% - 9.0% 7.7%
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 0.35
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.60% 7.00%
Tax rate 0.80% 1.70%
Debt/Equity ratio 1.81 1.81
Cost of debt 7.00% 10.20%
After-tax WACC 6.5% 9.0%
Selected WACC 7.7%

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 (6.30%) = 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.