ERTH.CN
EarthRenew Inc
Price:  
0.10 
CAD
Volume:  
866,017.00
Canada | Chemicals
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ERTH.CN WACC - Weighted Average Cost of Capital

The WACC of EarthRenew Inc (ERTH.CN) is 5.7%.

The Cost of Equity of EarthRenew Inc (ERTH.CN) is 5.90%.
The Cost of Debt of EarthRenew Inc (ERTH.CN) is 5.50%.

Range Selected
Cost of equity 5.10% - 6.70% 5.90%
Tax rate 0.90% - 4.30% 2.60%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.8% - 6.7% 5.7%
WACC

ERTH.CN WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.39 0.41
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.10% 6.70%
Tax rate 0.90% 4.30%
Debt/Equity ratio 0.42 0.42
Cost of debt 4.00% 7.00%
After-tax WACC 4.8% 6.7%
Selected WACC 5.7%

ERTH.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 ERTH.CN:

cost_of_equity (5.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.39) + 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.