Question
Provide the following: The appropriate discount rate for Netflix, Inc., and Amazon.com, Inc.s forecasted cash flows: (I found the info below on Forbes, Please explain
Provide the following:
The appropriate discount rate for Netflix, Inc., and Amazon.com, Inc.s forecasted cash flows:
(I found the info below on Forbes, Please explain this to me in your own words what this means, I also need help finding Amazons discount rate)
For Netflix we have assumed weighted average cost of capital (discount rate) of 11% and terminal growth rate of 3%. We conclude that Netflix will need to grow its annual free cash flow to the firm from $910 million in 2013 to $2.65 billion by 2020, implying a compounded annual growth rate of 16.5% for 7 years.
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