The WACC of Tauriga Sciences Inc (TAUG) is 9.6%.
| Range | Selected | |
| Cost of equity | 5.20% - 395.60% | 200.40% |
| Tax rate | 26.20% - 27.00% | 26.60% |
| Cost of debt | 7.00% - 18.80% | 12.90% |
| WACC | 5.2% - 13.9% | 9.6% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -36.88 | 39.23 |
| Additional risk adjustments | 171.0% | 171.5% |
| Cost of equity | 5.20% | 395.60% |
| Tax rate | 26.20% | 27.00% |
| Debt/Equity ratio | 1683.25 | 1683.25 |
| Cost of debt | 7.00% | 18.80% |
| After-tax WACC | 5.2% | 13.9% |
| Selected WACC | 9.6% | |
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 TAUG:
cost_of_equity (200.40%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-36.88) + risk_adjustments (171.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.