FFNT.CN WACC - Weighted Average Cost of Capital

The WACC of 4Front Ventures Corp (FFNT.CN) is 4.4%.

The Cost of Equity of 4Front Ventures Corp (FFNT.CN) is 8.10%.

The Cost of Debt of 4Front Ventures Corp (FFNT.CN) is 6.65%.

	Range	Selected
Cost of equity	6.00% - 10.20%	8.10%
Tax rate	27.60% - 43.00%	35.30%
Cost of debt	6.30% - 7.00%	6.65%
WACC	4.6% - 4.2%	4.4%

WACC

FFNT.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.56	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.00%	10.20%

Tax rate	27.60%	43.00%
Debt/Equity ratio	25.35	25.35
Cost of debt	6.30%	7.00%

After-tax WACC	4.6%	4.2%


Selected WACC	4.4%

FFNT.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 FFNT.CN:

cost_of_equity (8.10%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.56) + 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.