The WACC of Medical Marijuana Inc (MJNA) is 7773.3%.
| Range | Selected | |
| Cost of equity | 235,593.90% - 475,139.60% | 355,366.75% |
| Tax rate | 10.10% - 23.30% | 16.70% |
| Cost of debt | 4.60% - 20,269.60% | 10,137.10% |
| WACC | 4.9% - 15541.7% | 7773.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 51215.22 | 84845.49 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 235,593.90% | 475,139.60% |
| Tax rate | 10.10% | 23.30% |
| Debt/Equity ratio | 278248.29 | 278248.29 |
| Cost of debt | 4.60% | 20,269.60% |
| After-tax WACC | 4.9% | 15541.7% |
| Selected WACC | 7773.3% | |
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 MJNA:
cost_of_equity (355,366.75%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (51215.22) + 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.