PHBI WACC - Weighted Average Cost of Capital
The WACC of Pharmagreen Biotech Inc (PHBI) is 5.3%.
| Range | Selected | |
| Cost of equity | 5.4% - 6.8% | 6.1% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.8% - 5.8% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.33 | 0.35 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.4% | 6.8% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.49 | 0.49 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.8% | 5.8% |
| Selected WACC | 5.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PHBI | Pharmagreen Biotech Inc | 0.49 | -0.04 | -0.03 |
| APPB | Applied Biosciences Corp | 1772.92 | 0.22 | 0 |
| BTHE | Boston Therapeutics Inc | 0.44 | 0.22 | 0.17 |
| BVXV | BiondVax Pharmaceuticals Ltd | 1.06 | 1.83 | 1.03 |
| NBGV | NewBridge Global Ventures Inc | 0.14 | 0 | 0 |
| NPTX | Neuropathix Inc | 67.83 | 1.83 | 0.04 |
| SNNAQ | Sienna Biopharmaceuticals Inc | 974603.7 | 0 | 0 |
| TCDA | Tricida Inc | 20.35 | 0.21 | 0.01 |
| Low | High | |
| Unlevered beta | 0 | 0.02 |
| Relevered beta | 0 | 0.03 |
| Adjusted relevered beta | 0.33 | 0.35 |
PHBI'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 PHBI:
cost_of_equity (6.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.33) + 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.