DMS
Digital Media Solutions Inc
Price:  
2.74 
USD
Volume:  
478,449.00
United States | Media
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DMS WACC - Weighted Average Cost of Capital

The WACC of Digital Media Solutions Inc (DMS) is 9.1%.

The Cost of Equity of Digital Media Solutions Inc (DMS) is 84.85%.
The Cost of Debt of Digital Media Solutions Inc (DMS) is 7.00%.

Range Selected
Cost of equity 68.80% - 100.90% 84.85%
Tax rate 4.30% - 16.00% 10.15%
Cost of debt 7.00% - 7.00% 7.00%
WACC 8.9% - 9.2% 9.1%
WACC

DMS WACC calculation

Category Low High
Long-term bond rate 4.2% 4.7%
Equity market risk premium 5.0% 6.0%
Adjusted beta 12.92 15.95
Additional risk adjustments 0.0% 0.5%
Cost of equity 68.80% 100.90%
Tax rate 4.30% 16.00%
Debt/Equity ratio 27.36 27.36
Cost of debt 7.00% 7.00%
After-tax WACC 8.9% 9.2%
Selected WACC 9.1%

DMS'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 DMS:

cost_of_equity (84.85%) = risk_free_rate (4.45%) + equity_risk_premium (5.50%) * adjusted_beta (12.92) + 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.