Question
30. Cost of common stock equityCAPMNetflix common stock has a beta, b, of 1.7. The risk-free rate is 4%, and the market return is 9%.
30. Cost of common stock equityCAPMNetflix common stock has a beta, b, of 1.7. The risk-free rate is 4%, and the market return is 9%. a.Determine the risk premium on Netflix common stock. b.Determine the required return that Netflix common stock should provide. c.Determine Netflix's cost of common stock equity using the CAPM.
a.The risk premium on Netflix common stock is ____%. (Round to one decimal place) b.The required return that Netflix common stock should provide is ____%. (Round to one decimal place) c. Netflix's cost of common stock equity using the CAPM is ____%. (Round to one decimal place)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started