VIVO.TO
Vivo Cannabis Inc
Price:  
0.03 
CAD
Volume:  
3,742.00
Canada | Pharmaceuticals
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VIVO.TO WACC - Weighted Average Cost of Capital

The WACC of Vivo Cannabis Inc (VIVO.TO) is 6.0%.

The Cost of Equity of Vivo Cannabis Inc (VIVO.TO) is 6.35%.
The Cost of Debt of Vivo Cannabis Inc (VIVO.TO) is 5.50%.

Range Selected
Cost of equity 5.00% - 7.70% 6.35%
Tax rate 4.00% - 4.70% 4.35%
Cost of debt 4.00% - 7.00% 5.50%
WACC 4.6% - 7.3% 6.0%
WACC

VIVO.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.37 0.58
Additional risk adjustments 0.0% 0.5%
Cost of equity 5.00% 7.70%
Tax rate 4.00% 4.70%
Debt/Equity ratio 0.57 0.57
Cost of debt 4.00% 7.00%
After-tax WACC 4.6% 7.3%
Selected WACC 6.0%

VIVO.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 VIVO.TO:

cost_of_equity (6.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.37) + 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.