USMJ WACC - Weighted Average Cost of Capital
The WACC of North American Cannabis Holdings Inc (USMJ) is 5.3%.
| Range | Selected | |
| Cost of equity | 97.6% - 532.7% | 315.15% |
| Tax rate | 26.2% - 27.0% | 26.6% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 4.2% - 6.5% | 5.3% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 20.38 | 94.25 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 97.6% | 532.7% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 187.7 | 187.7 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 4.2% | 6.5% |
| Selected WACC | 5.3% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| USMJ | North American Cannabis Holdings Inc | 187.7 | 0 | 0 |
| BEV.CN | Bevcanna Enterprises Inc | 0.52 | -1.57 | -1.14 |
| HULK.V | Pontus Protein Ltd | 4.26 | 1.53 | 0.37 |
| MYM.CN | MYM Nutraceuticals Inc | 0.01 | 0.92 | 0.92 |
| NUMD | Nu-Med Plus Inc | 0.02 | 2.03 | 2 |
| ODII | Odyssey Semiconductor Technologies Inc | 6.43 | -0.14 | -0.03 |
| ROSN | Rosinbomb | 0.04 | 1.19 | 1.16 |
| SHRC.CN | Sharc International Systems Inc | 0.01 | 1.54 | 1.53 |
| VDKB | Vodka Brands Corp | 0 | -1.32 | -1.31 |
| YES.V | CHAR Technologies Ltd | 0.21 | 1.74 | 1.51 |
| Low | High | |
| Unlevered beta | 0.22 | 1.01 |
| Relevered beta | 29.93 | 140.18 |
| Adjusted relevered beta | 20.38 | 94.25 |
USMJ'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 USMJ:
cost_of_equity (315.15%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (20.38) + 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.