HARV.CN WACC - Weighted Average Cost of Capital
The WACC of Harvest Health & Recreation Inc (HARV.CN) is 7.4%.
| Range | Selected | |
| Cost of equity | 6.4% - 8.6% | 7.5% |
| Tax rate | 1.4% - 3.8% | 2.6% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 6.6% - 8.2% | 7.4% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.65 | 0.74 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.4% | 8.6% |
| Tax rate | 1.4% | 3.8% |
| Debt/Equity ratio | 0.29 | 0.29 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 6.6% | 8.2% |
| Selected WACC | 7.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HARV.CN | Harvest Health & Recreation Inc | 0.29 | 2.37 | 1.84 |
| ACRG.A.U.CN | Acreage Holdings Inc | 742.19 | 3.55 | 0 |
| AYR.A.CN | Ayr Wellness Inc | 16.12 | 2.94 | 0.18 |
| CWEB.TO | Charlotte's Web Holdings Inc | 3.1 | 0.82 | 0.2 |
| HEXO.TO | Hexo Corp | 6.59 | 2.15 | 0.29 |
| INVA | Innoviva Inc | 0.38 | 0.35 | 0.25 |
| KALA | Kala Pharmaceuticals Inc | 1.29 | 1.03 | 0.46 |
| OGI.TO | OrganiGram Holdings Inc | 0.13 | 2.28 | 2.03 |
| OSMT | Osmotica Pharmaceuticals PLC | 2.38 | 1.08 | 0.32 |
| TBPH | Theravance Biopharma Inc | 0.07 | 1.08 | 1.02 |
| ZGNX | Zogenix Inc | 0.11 | 0.9 | 0.82 |
| Low | High | |
| Unlevered beta | 0.29 | 0.46 |
| Relevered beta | 0.48 | 0.61 |
| Adjusted relevered beta | 0.65 | 0.74 |
HARV.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 HARV.CN:
cost_of_equity (7.50%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.65) + 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.