WEED.TO WACC - Weighted Average Cost of Capital

The WACC of Canopy Growth Corp (WEED.TO) is 7.9%.

The Cost of Equity of Canopy Growth Corp (WEED.TO) is 9.75%.

The Cost of Debt of Canopy Growth Corp (WEED.TO) is 6.95%.

	Range	Selected
Cost of equity	8.00% - 11.50%	9.75%
Tax rate	1.90% - 2.60%	2.25%
Cost of debt	6.90% - 7.00%	6.95%
WACC	7.2% - 8.6%	7.9%

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	0.95	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.00%	11.50%

Tax rate	1.90%	2.60%
Debt/Equity ratio	1.63	1.63
Cost of debt	6.90%	7.00%

After-tax WACC	7.2%	8.6%


Selected WACC	7.9%

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 (9.75%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.95) + 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.