XTRX.CN WACC - Weighted Average Cost of Capital

The WACC of Adastra Holdings Ltd (XTRX.CN) is 13.6%.

The Cost of Equity of Adastra Holdings Ltd (XTRX.CN) is 5.80%.

The Cost of Debt of Adastra Holdings Ltd (XTRX.CN) is 16.30%.

	Range	Selected
Cost of equity	5.10% - 6.50%	5.80%
Tax rate	1.00% - 2.50%	1.75%
Cost of debt	9.40% - 23.20%	16.30%
WACC	8.3% - 18.9%	13.6%

WACC

XTRX.CN WACC calculation

Category	Low	High

Long-term bond rate	3.2%	3.7%
Equity market risk premium	5.1%	6.1%
Adjusted beta	0.38	0.38

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	6.50%

Tax rate	1.00%	2.50%
Debt/Equity ratio	3.4	3.4
Cost of debt	9.40%	23.20%

After-tax WACC	8.3%	18.9%


Selected WACC	13.6%

XTRX.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 XTRX.CN:

cost_of_equity (5.80%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.38) + 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.