LOWL.CN WACC - Weighted Average Cost of Capital

The WACC of Lowell Farms Inc (LOWL.CN) is 8.6%.

The Cost of Equity of Lowell Farms Inc (LOWL.CN) is 145.65%.

The Cost of Debt of Lowell Farms Inc (LOWL.CN) is 7.30%.

	Range	Selected
Cost of equity	118.50% - 172.80%	145.65%
Tax rate	0.60% - 0.80%	0.70%
Cost of debt	7.00% - 7.60%	7.30%
WACC	8.1% - 9.2%	8.6%

WACC

LOWL.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	22.62	27.64

Additional risk adjustments	0.0%	0.5%
Cost of equity	118.50%	172.80%

Tax rate	0.60%	0.80%
Debt/Equity ratio	98.44	98.44
Cost of debt	7.00%	7.60%

After-tax WACC	8.1%	9.2%


Selected WACC	8.6%

LOWL.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 LOWL.CN:

cost_of_equity (145.65%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (22.62) + 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.