The valuation analysis for the last five years of the stock price is as follows: The price of Netflix stock price over the last five years is list as (Jan. 27, 2017 $142.45, Jan. 26, 2018 $274.60, Jan. 25, 2019 $338.05, Jan. 31, 2020 $345.09, Jan. 29, 2021 $532.39). Expected rate of return per annum is 38% and per month is 3.14%. Also, the dividend increase per annum is $1.4125. The expected rate of return per is 38% and therefore, the stock price has a present value of $1,771.74 at a discounting rate of 8%. The dividend expected for the next five years is 7.4925, 8.905, 10.3175, 11.73, and 13.1425 respectively. The present values of the dividends are 40.32893 using a discounting rate of 8%. This analysis implies that the present value of the investment (return) is $1,812.069 at an investment of $523.39 and therefore very profitable since $523.39 is the cost of one share in other words the profit is $1,288.479. On risk analysis, the task lies in the computation of the cutting-edge growth stocks. It is made easy with the aid of Zack’s Growth Style Score, which does not only pay attention to the traditional growth components to analyze a corporation’s real growth prediction. Netflix is highly recommendable. The company has an encouraging growth score and nevertheless, carries a top Zack’s rank. However, in the case of any sign of a downward trend in the performance of the stock, I will sell it and invest the money in another investment product to avoid losing the principal amount since the future still has some chance of uncertainty. However, depending on the income gained in the form of dividends, I might reinvest it in another investment product whose returns and those of the common stock of Netflix are uncorrelated. This should enable the creation of a diversified portfolio. Nevertheless, if my assumptions about the stock performance at Netflix is maintained, I will buy more stock to maximize my returns. In conclusion, an investor goal is to aim at increasing their wealth though investment. The income gained is reinvested in many instances. The overall goal is to attain a rate of return.

Calculate the expected rate of return per annum and per month, the expected dividend rate over five years, along with the risk beta.