The WACC of THC Biomed Intl Ltd (THC.CN) is 4.2%.
Range | Selected | |
Cost of equity | 4.5% - 6.9% | 5.7% |
Tax rate | 25.9% - 26.5% | 26.2% |
Cost of debt | 5.0% - 5.0% | 5% |
WACC | 3.9% - 4.5% | 4.2% |
Category | Low | High |
Long-term bond rate | 3.2% | 3.7% |
Equity market risk premium | 5.1% | 6.1% |
Adjusted beta | 0.25 | 0.45 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 4.5% | 6.9% |
Tax rate | 25.9% | 26.5% |
Debt/Equity ratio | 2.74 | 2.74 |
Cost of debt | 5.0% | 5.0% |
After-tax WACC | 3.9% | 4.5% |
Selected WACC | 4.2% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
THC.CN | THC Biomed Intl Ltd | 2.74 | -0.29 | -0.09 |
CPMD | CannaPharmaRx Inc | 2.71 | -0.81 | -0.27 |
GRIN.CN | Grown Rogue International Inc | 0.09 | 1.72 | 1.61 |
IPCI.TO | Intellipharmaceutics International Inc | 1.06 | -0.25 | -0.14 |
KAYS | Kaya Holdings Inc | 6.31 | 0.3 | 0.05 |
MPXI.CN | MPX International Corp | 27.06 | 0 | 0 |
OILS.CN | Nextleaf Solutions Ltd | 0.04 | 1.96 | 1.91 |
PVCT | Provectus Biopharmaceuticals Inc | 0.1 | 0.08 | 0.07 |
SUGR.V | SugarBud Craft Growers Corp | 1.12 | 0.69 | 0.38 |
Low | High | |
Unlevered beta | 0.01 | 0.07 |
Relevered beta | -0.12 | 0.18 |
Adjusted relevered beta | 0.25 | 0.45 |
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 THC.CN:
cost_of_equity (5.70%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.25) + 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.