The current yields-to-maturity on 1 year, 10 year and 30 year Canadian government bonds are 0.6%, 1.4% and 1.8%, respectively. Assume the appropriate market risk premium is 7%. What would be the cost of debt (i.e., required return by bondholders) for OrganiGram (consider data in the text, above, as well as data in tabs 3, 4 and 6 of the spreadsheet)? Justify your response by considering and discussing alternatives. What is an appropriate beta and cost of equity (i.e., required return by shareholders) based on the tab 7 of the spreadsheet)? Again, justify your response by considering and discussing alternatives (6 points).

Company Comp Set Company Name (Ticker Symbol) LTM Net LTM * Gross LTM EBITDA LTM EBIT LTM Total Margin (Gross Margin (EBITDA Margin (EBIT / Revenues, 1 Yr Profit / Revenue) / Revenue) % Revenue) % Growth % % LTM Total Latest Debt / Capital Closing % 2 Price Debt 1 Shares Outstanding (Millions) Market Where Shares Trade Market Capitalization (Million $) Aphria, Inc. (TSXV:APH) Mettrum Health Corp. (TSXV:MT) Canopy Growth Corporation (TSX:CGC) 82.8% 72.0% 102.0% 12.7% -46.9% -18.3% 2.0% -61.0% -34.4% 689.4% 195.4% 425.8% ($34.50) ($6.30) ($11.60) 9.7% 9.7% 3.0% $3.58 $3.89 $5.12 93.7 46.9 107.4 $335.4 $182.4 $549.9 TSX Venture TSX Venture TSX Organigram Holdings Inc. (TSXV:OGI) 81.5% 13.2% -0.1% 1486.8% $3.84 39.4% $2.18 84.7 $184.6 TSX Venture * LTM = last 12 months 1 Net Debt = Short-term plus long-term debt minus cash 2 Total Debt = Short-Term plus long term debt; Capital = Total Debt + Equity Organigram Holdings Inc. (TSXV:OGI) > Debt Details Capital Structure As Reported Details Description Type Issued Maturity Secured Convertible Yes Farm Credit Canada Loan Farm Credit Canada Loan Non Brokered Private Placement Private Placement Term Loans Term Loans Other Borrowings Debenture Principal Due (Million Dollars) $1.50 $2.50 $1.00 $2.90 Coupon Rate 5.94% 5.45% 9.00% 6.75% August-15 November-14 July-15 November-15 Aug 31 2025 December 1, 2019 September 1, 2017 Dec 31 2018 Yes No No No No No No Company Comp Set Company Name (Ticker Symbol) LTM Net LTM * Gross LTM EBITDA LTM EBIT LTM Total Margin (Gross Margin (EBITDA Margin (EBIT / Revenues, 1 Yr Profit / Revenue) / Revenue) % Revenue) % Growth % % LTM Total Latest Debt / Capital Closing % 2 Price Debt 1 Shares Outstanding (Millions) Market Where Shares Trade Market Capitalization (Million $) Aphria, Inc. (TSXV:APH) Mettrum Health Corp. (TSXV:MT) Canopy Growth Corporation (TSX:CGC) 82.8% 72.0% 102.0% 12.7% -46.9% -18.3% 2.0% -61.0% -34.4% 689.4% 195.4% 425.8% ($34.50) ($6.30) ($11.60) 9.7% 9.7% 3.0% $3.58 $3.89 $5.12 93.7 46.9 107.4 $335.4 $182.4 $549.9 TSX Venture TSX Venture TSX Organigram Holdings Inc. (TSXV:OGI) 81.5% 13.2% -0.1% 1486.8% $3.84 39.4% $2.18 84.7 $184.6 TSX Venture * LTM = last 12 months 1 Net Debt = Short-term plus long-term debt minus cash 2 Total Debt = Short-Term plus long term debt; Capital = Total Debt + Equity Organigram Holdings Inc. (TSXV:OGI) > Debt Details Capital Structure As Reported Details Description Type Issued Maturity Secured Convertible Yes Farm Credit Canada Loan Farm Credit Canada Loan Non Brokered Private Placement Private Placement Term Loans Term Loans Other Borrowings Debenture Principal Due (Million Dollars) $1.50 $2.50 $1.00 $2.90 Coupon Rate 5.94% 5.45% 9.00% 6.75% August-15 November-14 July-15 November-15 Aug 31 2025 December 1, 2019 September 1, 2017 Dec 31 2018 Yes No No No No No No