1. PerformsensitivityanalysisontheWACCandgrowthratesinyourDCFanalysis.Makesurethatyoursensitivityiscenteredaroundyourbaseresults.

DCF analysis attached along with this. Please transfer it to an excel and do work there and make the writeup in doc.

Netflix Incorporation Discounted Free cash flows DCF= fcf*( [1+g1/(1+d)+(1+g1)2+....(1+g1)10/(1+g1)10])+ (1+g1)10/(1+d)10*{(1+g2)/(1+d) +(1+g2)2/(1+d)2+.......+(1+g2)10/(1+d)10} Make x= (1+g1)/ (1+d) = (1+0.5)/ (1+0.12) = 0.9375 Make y= (1+g2)/ (1+d) = (1+0.04)/ (1.12) = 0.92857 DCF= fcf* {[x+x2+....... + x10] + x10* [y+y2+.....+y10]} DCF= fcf*[x*(1-x10)/ (1-x) +x10*y*(1-y10)/ (1-y)] = -2.1075*10.70156 = -22.56 The margin of safety of Netflix Company = dcf - current/dcf = (-22.558- 95.10)/ -22.558 = Netflix has no margin of safety