NOVA.CN
Nova Mentis Life Science Corp
Price:  
0.04 
CAD
Volume:  
95,692.00
Canada | Biotechnology
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NOVA.CN WACC - Weighted Average Cost of Capital

The WACC of Nova Mentis Life Science Corp (NOVA.CN) is 7.4%.

The Cost of Equity of Nova Mentis Life Science Corp (NOVA.CN) is 11.05%.
The Cost of Debt of Nova Mentis Life Science Corp (NOVA.CN) is 5.00%.

Range Selected
Cost of equity 9.60% - 12.50% 11.05%
Tax rate 25.90% - 26.50% 26.20%
Cost of debt 5.00% - 5.00% 5.00%
WACC 6.7% - 8.1% 7.4%
WACC

NOVA.CN WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.27 1.37
Additional risk adjustments 0.0% 0.5%
Cost of equity 9.60% 12.50%
Tax rate 25.90% 26.50%
Debt/Equity ratio 1 1
Cost of debt 5.00% 5.00%
After-tax WACC 6.7% 8.1%
Selected WACC 7.4%

NOVA.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 NOVA.CN:

cost_of_equity (11.05%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.27) + 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.