Value of Operations
Netflix, Inc.
(In Millions)
Value of operations Actual Projected
2013
Long-term growth rate
Weighted Avg. Cost of Cap. (WACC)
Free Cash Flow
( CFn x (1+ g) ) / (r - g)
Horizon Value #DIV/0!
PV of the horizon value and of the free cash flows.
PV of Horizon Value @ WACC #DIV/0!
PV of free cash flows @ WACC $-
Value of Operations #DIV/0!
Weighted Average Cost of Capital
Netflix, Inc.
Formula
WACC = Weighted average cost of capital
rD (1- Tc )*( D / V )+ rE *( E / V )
Where:
rD = The required return of the firm's Debt financing
(1-Tc) = The Tax adjustment for interest expense
(D/V) = (Debt/Total Value)
rE = the firm's cost of equity
(E/V) = (Equity/Total Value)
WACC Calculation
rD =
(1-Tc) =
(D/V) = #DIV/0!
rE = 0.00%
(E/V) = #DIV/0!
Total Debt D =
Total Equity E =
Total Firm Value =
rE = rf+B(rM-Rf) =
Risk Free rate rf =
Historical Mkt return rm =
Beta = Average Beta of 2.03 and 0 as quoted below.
WACC = #DIV/0!
Additional Data
Last Sale: $417.83
Share Volume: 4,179,281
Today's High: $421.74
Best Bid: N/A
52 Week High: $458
Earnings Per Share (EPS): $2.66
NASDAQ Official Open Price: $415.52
NASDAQ Official Close Price: $417.83
Net Change: 2.63 ? 0.63%
Previous Close: $415.20
Today's Low: $411.61
Best Ask: N/A
52 Week Low: $205.75
P/E Ratio: 157.08
Date of Open Price: 30-May-14
Date of Close Price: 30-May-14
http://www.nasdaq.com/symbol/nflx#ixzz33QWjU6c2
Source: nasdaq.com Source:http://www.google.com/finance?cid=4592563
Instrinsic Value Using the Discount Cash Flow Method
Netflix, Inc.
Cash Flow Statement ( in millions)
Actuals
2009 2010 2011 2012 2013 2014 (Q1)
Cash from Operating Activities
Capital Expenditure
Free Cash Flow $- $- $- $- $- $-
Capital Expenditure Adjustments
Free Cash Flow after Adjustments $- $- $- $- $- $-
Growth (excluding adjustments) #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Average Growth (2009-2013) (1) #DIV/0!
Discount Cash Flow Formula
DCF= CF1/(1+r)^1+cf2/(1+r)^2+…+CFn/(1+r)^n
Where,
CF= Cash Flow
r= discount race (WACC)
