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DSS WACC %

:11.77% (As of Today)
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As of today (2021-10-23), DSS's weighted average cost of capital is 11.77%. DSS's ROIC % is -17.53% (calculated using TTM income statement data). DSS earns returns that do not match up to its cost of capital. It will destroy value as it grows.


DSS WACC % Historical Data

The historical data trend for DSS's WACC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

DSS Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
WACC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 11.42 19.84 13.63 10.32 11.02

DSS Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
WACC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 11.65 10.55 11.02 13.44 12.44

Competitive Comparison

For the Specialty Business Services subindustry, DSS's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

DSS WACC % Distribution

For the Business Services industry and Industrials sector, DSS's WACC % distribution charts can be found below:

* The bar in red indicates where DSS's WACC % falls into.



DSS WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, DSS's market capitalization (E) is $91.708 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Jun. 2021, DSS's latest two-year average Short-Term Debt & Capital Lease Obligation was $0.7545 Mil and its latest two-year average Long-Term Debt & Capital Lease Obligation was $2.16 Mil. The total Book Value of Debt (D) is $2.9145 Mil.
a) weight of equity = E / (E + D) = 91.708 / (91.708 + 2.9145) = 0.9692
b) weight of debt = D / (E + D) = 2.9145 / (91.708 + 2.9145) = 0.0308

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 1.68000000%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. DSS's beta is 1.71.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 1.68000000% + 1.71 * 6% = 11.94%

3. Cost of Debt:
GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.
As of Dec. 2020, DSS's interest expense (positive number) was $0.185 Mil. Its total Book Value of Debt (D) is $2.9145 Mil.
Cost of Debt = 0.185 / 2.9145 = 6.3476%.

4. Multiply by one minus Average Tax Rate:
GuruFocus uses the latest two-year average tax rate to do the calculation. The calculated average tax rate is limited to between 0% and 100%. If the calculated average tax rate is higher than 100%, it is set to 100%. If the calculated average tax rate is less than 0%, it is set to 0%.
The latest Two-year Average Tax Rate is less than 0%, and it's set to 0%.

DSS's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.9692*11.94%+0.0308*6.3476%*(1 - 0%)
=11.77%

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


DSS  (AMEX:DSS) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, DSS's weighted average cost of capital is 11.77%. DSS's ROIC % is -17.53% (calculated using TTM income statement data). DSS earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.


Related Terms

DSS Business Description

DSS logo
Industry
Industrials » Business Services NAICS : 323120 SIC : 2759
Traded in Other Exchanges
N/A
Address
6 Framark Drive, Suite 300, Victor, NY, USA, 14564
Document Security Systems Inc is a multinational company operating business focused on four segments namely Direct Marketing/Online Sales Group; Premier Packaging; Digital Group; and IP Technology. It derives majority of revenue from Premier Packaging segment that produces custom consumer packaging serving clients in the pharmaceutical, nutraceutical, beverage, specialty foods, photo packaging, and direct marketing industries, among others. It also provides active and intelligent packaging and document security printing services for end-user customers along with technical support for its technology licensees. The division produces a wide array of printed materials, such as folding cartons and paperboard packaging, security paper, vital records, prescription paper, among others.
Executives
Chan Fai director, 10 percent owner 2601 INSLAND PLACE TOWER 510 KINGS RD N POINT HONG KONG K3 999999999
Chan Tung Moe director 1601 BLAKE ST, SUITE 310 DENVER CO 80202
Global Biomedical Pte. Ltd. 10 percent owner 7 TEMASEK BOULEVARD #29-01B SUNTEC TOWER ONE SINGAPORE U0 038987
Wu William Wai Leung director C/O DOCUMENT SECURITY SYSTEMS, INC. 200 CANAL VIEW BLVD., SUITE 300 ROCHESTER NY 14624
Escudero Jose director 200 CANAL VIEW BOULEVARD, SUITE 300 ROCHESTER NY 14623
Lee Sassuan (samson) director 200 CANAL VIEW BLVD., SUITE 300 ROCHESTER NY 14623
Sanders Joseph L. director C/O DOCUMENT SECURITY SYSTEMS, INC. 28 EAST MAIN STREET, SUITE 1525 ROCHESTER NY 14614
Grady Jason officer: Chief Operating Officer 1093 CARRINGTON WAY VICTOR NY 14564
Grisham Stanley V. director 2 CRESTED CLOUD CT. THE WOODLANDS TX 77380
Lo Wah Wai director 6-8 HARBOUR ROAD 33/F., SHUI ON CENTRE, SUITES 06-12 WAN CHAI K3 000000
Delgiorno Daniel director 22 MARY LU DRIVE HOLTSVILLE NY 11742
Heuszel Frank D director, officer: Chief Executive Officer 20611 PRINCE CREEK DRIVE KATY TX 77450
Thatch John director C/O SHARING SERVICES, INC. 1701 COIT ROAD, SUITE 100 PLANO TX 75075
Avallone Pamela director 200 CANAL VIEW BLVD, SUITE 300, ROCHESTER NY 14623
Scott Brett L director 15770 LAGUNA CANYON ROAD SUITE 150 IRVINE CA 92618

DSS Headlines

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