Problem
Topic Netflix
Equity Valuation
I. Estimate cost of capital measures for the company, which include debt capital, equity capital, and the weighted-average cost of capital. For this project, it is unnecessary to derive a Beta estimate; it can be obtained from various market sources (e.g., Yahoo Finance).
II. Estimate equity value per share using the discounted cash flow (DCF) valuation model. (Valuation tables can be set in smaller font to fit.)
III. Estimate equity value per share using the residual operating income (ROPI) valuation model. (Valuation tables can be set in smaller font to fit.)
IV. Perform sensitivity analysis of the valuation results in parts B and C, such as sales growth, key reformulations of the financial statements, forecast assumptions, NOPAT, NOA, WACC, and terminal growth. Interpret all findings.