Cost of common stock equityCAPM Netflix common stock has a beta, b, of 0.8. The...
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Cost of common stock equityCAPM Netflix common stock has a beta, b, of 0.8. The risk-free rate is 4%, and the market return is 8%. 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) Retained earnings versus new common stock Using the data for a firm shown in the following table, calculate the cost of retained earnings and the cost of new common stock using the constant-growth valuation model. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Current market price per share $55.00 Projected Dividend dividend per growth rate share next year 8% $2.20 Underpricing Flotation cost per share per share $1.00 $2.00 a. The cost of retained earnings is %. (Round to two decimal places.)
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