Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Textbook Question
Chapter 9, Problem 9.9P
Cost of common stock equity:
- 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.
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Students have asked these similar questions
Netflix common stock has a beta,
b,
of
1.7.
The risk-free rate is
6%,
and the market return is
11%.
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.
Netflix common stock has a beta, b, of 1.5.The risk-free rate is 6%,and the market return is 12%.
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)
Netflix common stock has a beta, b, of 1.3. The risk-free rate is 5%,and the expected market return is 11%.
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.
Chapter 9 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 9.1 - What is the cost of capital?Ch. 9.1 - Prob. 9.2RQCh. 9.1 - Prob. 9.3RQCh. 9.1 - What are the typical sources of long-term capital...Ch. 9.2 - Prob. 9.5RQCh. 9.2 - Prob. 9.6RQCh. 9.2 - Prob. 9.7RQCh. 9.3 - How would you calculate the cost of preferred...Ch. 9.4 - What premise about share value underlies the...Ch. 9.4 - How do the constant-growth valuation model and...
Ch. 9.4 - Why is the cost of financing a project with...Ch. 9.5 - Prob. 9.13RQCh. 9.5 - Prob. 9.14RQCh. 9.5 - Prob. 9.15RQCh. 9 - In the chapter opener you learned that Johnson ...Ch. 9 - Learning Goals 3, 4, 5, 6 ST9-1 Individual...Ch. 9 - Prob. 9.1WUECh. 9 - Prob. 9.2WUECh. 9 - Duke Energy has been paying dividends steadily for...Ch. 9 - Weekend Warriors Inc. has 35% debt and 65% equity...Ch. 9 - Oxy Corporation uses debt, preferred stock, and...Ch. 9 - Concept of cost of capital and WACC Mace...Ch. 9 - Prob. 9.2PCh. 9 - Before-tax cost of debt and after-tax cost of debt...Ch. 9 - Prob. 9.4PCh. 9 - The cost of debt Gronseth Drywall Systems Inc. is...Ch. 9 - After-tax cost of debt Bella Wans is interested in...Ch. 9 - Cost of preferred stock Taylor Systems has just...Ch. 9 - Cost of preferred stock Determine the cost for...Ch. 9 - Cost of common stock equity: CAPM Netflix common...Ch. 9 - Retained earnings versus new common stock Using...Ch. 9 - The effect of tax rate on WACC K. Bell Jewelers...Ch. 9 - WACC: Market value weights The market values and...Ch. 9 - WACC: Book weights and market weights Webster...Ch. 9 - WACC and target weights After careful analysis,...Ch. 9 - Cost of capital Edna Recording Studios Inc....Ch. 9 - Calculation of individual costs and WACC Dillon...Ch. 9 - Prob. 9.18PCh. 9 - Calculation of individual costs and WACC Lang...Ch. 9 - Weighted average cost of capital (WACC) American...Ch. 9 - Prob. 9.21PCh. 9 - Eco Plastics Company Since its inception, Eco...
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What is WACC-Weighted average cost of capital; Author: Learn to invest;https://www.youtube.com/watch?v=0inqw9cCJnM;License: Standard YouTube License, CC-BY