HUGE.CN WACC - Weighted Average Cost of Capital
The WACC of FSD Pharma Inc (HUGE.CN) is 7.3%.
| Range | Selected | |
| Cost of equity | 5.5% - 9.5% | 7.5% |
| Tax rate | 25.9% - 26.5% | 26.2% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 5.4% - 9.2% | 7.3% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.45 | 0.88 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.5% | 9.5% |
| Tax rate | 25.9% | 26.5% |
| Debt/Equity ratio | 0.05 | 0.05 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 5.4% | 9.2% |
| Selected WACC | 7.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| HUGE.CN | FSD Pharma Inc | 0.05 | 2.76 | 2.66 |
| ALID | Allied Corp | 4.92 | -0.35 | -0.08 |
| ASP.TO | Acerus Pharmaceuticals Corporation | 11.68 | 1.14 | 0.12 |
| COOL.CN | Core One Labs Inc | 0.04 | 0.14 | 0.13 |
| CURR | Cure Pharmaceutical Holding Corp | 0.01 | -1.55 | -1.53 |
| EASY.CN | Speakeasy Cannabis Club Ltd | 0.12 | 1.03 | 0.94 |
| EVOK | Evoke Pharma Inc | 0.89 | 1.75 | 1.06 |
| FLWR.V | Flowr Corp | 2.08 | 0.52 | 0.21 |
| KHRN.V | Khiron Life Sciences Corp | 0.31 | 1.83 | 1.49 |
| NRTH.V | 48North Cannabis Corp | 0.05 | 1.3 | 1.25 |
| TBP.TO | Tetra Bio Pharma Inc | 0.29 | 1.87 | 1.54 |
| Low | High | |
| Unlevered beta | 0.21 | 1.06 |
| Relevered beta | 0.18 | 0.82 |
| Adjusted relevered beta | 0.45 | 0.88 |
HUGE.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 HUGE.CN:
cost_of_equity (7.50%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.45) + 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.