WEED.TO WACC - Weighted Average Cost of Capital

The WACC of Canopy Growth Corp (WEED.TO) is 8.8%.

The Cost of Equity of Canopy Growth Corp (WEED.TO) is 9.30%.

The Cost of Debt of Canopy Growth Corp (WEED.TO) is 7.85%.

	Range	Selected
Cost of equity	6.50% - 12.10%	9.30%
Tax rate	0.90% - 1.80%	1.35%
Cost of debt	7.00% - 8.70%	7.85%
WACC	6.7% - 10.9%	8.8%

WACC

WEED.TO WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.66	1.31

Additional risk adjustments	0.0%	0.5%
Cost of equity	6.50%	12.10%

Tax rate	0.90%	1.80%
Debt/Equity ratio	0.52	0.52
Cost of debt	7.00%	8.70%

After-tax WACC	6.7%	10.9%


Selected WACC	8.8%

WEED.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 WEED.TO:

cost_of_equity (9.30%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.66) + 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.