XLY.TO
Auxly Cannabis Group Inc
Price:  
0.13 
CAD
Volume:  
1,573,480.00
Canada | Pharmaceuticals
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XLY.TO WACC - Weighted Average Cost of Capital

The WACC of Auxly Cannabis Group Inc (XLY.TO) is 8.4%.

The Cost of Equity of Auxly Cannabis Group Inc (XLY.TO) is 9.90%.
The Cost of Debt of Auxly Cannabis Group Inc (XLY.TO) is 5.00%.

Range Selected
Cost of equity 8.30% - 11.50% 9.90%
Tax rate 5.90% - 7.50% 6.70%
Cost of debt 5.00% - 5.00% 5.00%
WACC 7.3% - 9.5% 8.4%
WACC

XLY.TO WACC calculation

Category Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 1.01 1.2
Additional risk adjustments 0.0% 0.5%
Cost of equity 8.30% 11.50%
Tax rate 5.90% 7.50%
Debt/Equity ratio 0.4 0.4
Cost of debt 5.00% 5.00%
After-tax WACC 7.3% 9.5%
Selected WACC 8.4%

XLY.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 XLY.TO:

cost_of_equity (9.90%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (1.01) + 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.