XLY.TO WACC - Weighted Average Cost of Capital
The WACC of Auxly Cannabis Group Inc (XLY.TO) is 8.1%.
| Range | Selected | |
| Cost of equity | 8.1% - 12.2% | 10.15% |
| Tax rate | 5.9% - 7.5% | 6.7% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 6.8% - 9.3% | 8.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.96 | 1.32 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 8.1% | 12.2% |
| Tax rate | 5.9% | 7.5% |
| Debt/Equity ratio | 0.61 | 0.61 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 6.8% | 9.3% |
| Selected WACC | 8.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| XLY.TO | Auxly Cannabis Group Inc | 0.61 | 1.65 | 1.05 |
| ACB.TO | Aurora Cannabis Inc | 0.25 | 1.57 | 1.27 |
| BHC.TO | Bausch Health Companies Inc | 13.13 | 1.09 | 0.08 |
| CURA.CN | Curaleaf Holdings Inc | 0.23 | 1.48 | 1.22 |
| SNDL | Sundial Growers Inc | 0.33 | 0.43 | 0.33 |
| TER.CN | Terrascend Corp | 0.33 | 1.01 | 0.77 |
| TLRY | Tilray Inc | 0.81 | 0.85 | 0.49 |
| Low | High | |
| Unlevered beta | 0.6 | 0.94 |
| Relevered beta | 0.94 | 1.48 |
| Adjusted relevered beta | 0.96 | 1.32 |
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 (10.15%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.96) + 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.