VREO.CN WACC - Weighted Average Cost of Capital

The WACC of Vireo Health International Inc (VREO.CN) is 9.8%.

The Cost of Equity of Vireo Health International Inc (VREO.CN) is 6.35%.

The Cost of Debt of Vireo Health International Inc (VREO.CN) is 22.40%.

	Range	Selected
Cost of equity	5.40% - 7.30%	6.35%
Tax rate	25.90% - 26.50%	26.20%
Cost of debt	20.20% - 24.60%	22.40%
WACC	8.6% - 11.0%	9.8%

WACC

VREO.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.44	0.52

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.40%	7.30%

Tax rate	25.90%	26.50%
Debt/Equity ratio	0.52	0.52
Cost of debt	20.20%	24.60%

After-tax WACC	8.6%	11.0%


Selected WACC	9.8%

VREO.CN'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 VREO.CN:

cost_of_equity (6.35%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.44) + 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.