VFF.TO WACC - Weighted Average Cost of Capital
The WACC of Village Farms International Inc (VFF.TO) is 7.6%.
| Range | Selected | |
| Cost of equity | 6.8% - 9.3% | 8.05% |
| Tax rate | 30.0% - 34.7% | 32.35% |
| Cost of debt | 5.7% - 7.0% | 6.35% |
| WACC | 6.4% - 8.7% | 7.6% |
| Category | Low | High |
| Long-term bond rate | 3.4% | 3.9% |
| Equity market risk premium | 4.7% | 5.7% |
| Adjusted beta | 0.73 | 0.87 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 6.8% | 9.3% |
| Tax rate | 30.0% | 34.7% |
| Debt/Equity ratio | 0.15 | 0.15 |
| Cost of debt | 5.7% | 7.0% |
| After-tax WACC | 6.4% | 8.7% |
| Selected WACC | 7.6% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| VFF.TO | Village Farms International Inc | 0.15 | 3.73 | 3.4 |
| AGRS | Agristar Inc | 0.79 | -102.14 | -67.07 |
| ALCO | Alico Inc | 0.41 | 0.19 | 0.15 |
| IGP.V | Imperial Ginseng Products Ltd | 1.18 | 1.32 | 0.74 |
| LMNR | Limoneira Co | 0.15 | 0.6 | 0.55 |
| SANW | S&W Seed Co | 4.39 | 1.73 | 0.44 |
| STEV | Stevia Corp | 0.36 | -0.06 | -0.05 |
| SVIN | Scheid Vineyards Inc | 2.42 | 0.17 | 0.07 |
| YEWB | Yew Bio-Pharm Group Inc | 868.46 | 1.82 | 0 |
| Low | High | |
| Unlevered beta | 0.08 | 0.38 |
| Relevered beta | 0.6 | 0.81 |
| Adjusted relevered beta | 0.73 | 0.87 |
VFF.TO'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 VFF.TO:
cost_of_equity (8.05%) = risk_free_rate (3.65%) + equity_risk_premium (5.20%) * adjusted_beta (0.73) + 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.