LOVE.CN
Cannara Biotech Inc
Price:  
0.12 
CAD
Volume:  
656,030.00
Canada | Pharmaceuticals
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LOVE.CN WACC - Weighted Average Cost of Capital

The WACC of Cannara Biotech Inc (LOVE.CN) is 7.8%.

The Cost of Equity of Cannara Biotech Inc (LOVE.CN) is 8.20%.
The Cost of Debt of Cannara Biotech Inc (LOVE.CN) is 7.00%.

Range Selected
Cost of equity 6.60% - 9.80% 8.20%
Tax rate 26.50% - 26.50% 26.50%
Cost of debt 7.00% - 7.00% 7.00%
WACC 6.4% - 9.2% 7.8%
WACC

LOVE.CN WACC calculation

Category Low High
Long-term bond rate 3.4% 3.9%
Equity market risk premium 4.7% 5.7%
Adjusted beta 0.69 0.94
Additional risk adjustments 0.0% 0.5%
Cost of equity 6.60% 9.80%
Tax rate 26.50% 26.50%
Debt/Equity ratio 0.15 0.15
Cost of debt 7.00% 7.00%
After-tax WACC 6.4% 9.2%
Selected WACC 7.8%

LOVE.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 LOVE.CN:

cost_of_equity (8.20%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.69) + 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.