Assumed weighted average cost of capital

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Reference no: EM131939250

The appropriate discount rate for Netflix, Inc., and Amazon.com, Inc.’s forecasted cash flows:

(I found the info below on Forbes, Please explain this to me in your own words what this means, I also need help finding Amazon’s discount rate)

For Netflix we have assumed weighted average cost of capital (discount rate) of 11% and terminal growth rate of 3%. We conclude that Netflix will need to grow its annual free cash flow to the firm from $910 million in 2013 to $2.65 billion by 2020, implying a compounded annual growth rate of 16.5% for 7 years.

Reference no: EM131939250

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