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Estimated Price/Share=$12.07
Company Name: NETFLIX INC
Required Valuation Parameters (to compute value of common equity):
10.00%
0
3/1/2005
1.00
Enter Cost of Debt: –———————————————————————————————> 8.00%
Enter Cost of Preferred Stock: ——————————-———————————————-> 9.00%
Implied Cost of Equity Calculator
This calculator solves for the cost of equity capital that generates a given price/share.
To use the calculator, enter a price, hit return and click the ‘Calculate’ button.
Price/Share = $12.07 1.000000
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Enter Dilution Factor for Splits Occurring Since Latest Fiscal Year End:
————>
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Optional Valuation Parameters (to compute value to all investors):
Valuation Parameters
Enter Cost of Equity Capital:
Enter Date of Valuation:
Enter Value of Contingent Claims on Common Equity ($000):
Calculate
Contingent Claims Calculator
(Use this calculator to estimate the value of contingent claims on common equity,
such as employee stock options and convertible bonds)
Current Stock Price $40.00
Exercise Price $40.00
Years to Expiration 5
Standard Deviation of Annual Stock Return 30.00%
Annual Dividend Yield 4.00%
Value of Contingent Claim Per Share #NAME?
Number of Shares Subject to Claim (000s)
1,000
Total Value of Contingent Claim ($000s) #NAME?
Residual Income Valuation ($000)
Company Name NETFLIX INC
Most Recent Fiscal Year End 12/31/2004
Date of Valuation 3/1/2005
Cost of Common Equity 10.00%
Fiscal Year of Forecast 12/31/2005 12/31/2006 12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015
Valuation to Common Equity
Net Income 18,400 62,038 76,216 85,641 87,191 79,483 83,457 87,630 92,011 96,612 101,442
Common Equity at Beginning of Year 156,283 204,019 283,665 381,245 475,032 545,336 572,603 601,233 631,295 662,860 696,003
Residual Income 2,772 41,636 47,850 47,516 39,688 24,949 26,197 27,506 28,882 30,326 31,842
Present Value of Residual Income 2,520 34,410 35,950 32,454 24,643 14,083 13,443 12,832 12,249 11,692 11,160
Present Value Beyond 20 Years 154,195
Present Value of First 20 Years 285,611
Common Equity as of
12/31/2004 156,283
Forecast Equity Value Before Time Adj. 596,089
Forecasted Value as of Valuation Date 636,499
Less Value of Contingent Equity Claims 0
Value Attributable to Common Equity 636,499
Common Shares Outstanding at BS Date 52,732
Equivalent Shares at Valuation Date 52,732
Forecast Price/Share $12.07
Valuation to all Investors
Cost of Debt 8.00%
Cost of Preferred Stock 9.00%
After Tax Weighted Average Cost of Capital 8.91%
Interest Expense to Debtholders 44 51 56 53 40 18 19 20 21 22 24
Beginning Book Value of Debt 68 93 134 180 224 257 270 283 298 313 328
Residual Interest Expense 39 44 45 38 22 (2) (2) (2) (2) (3) (3)
Present Value of Residual Interest Income 36 38 36 28 15 (1) (1) (1) (1) (1) (1)
Value of Debt 172
Dividends to Preferred Stockholders 0 0 0 0 0 0 0 0 0 0 0
Beginning Book Value of Preferred Stock 0 0 0 0 0 0 0 0 0 0 0
Residual Income to Preferred Stock 0 0 0 0 0 0 0 0 0 0 0
Present Value of Preferred Residual Income 0 0 0 0 0 0 0 0 0 0 0
Value of Preferred Stock 0
Net Operating Income 18,444 62,090 76,267 85,684 87,220 79,495 83,469 87,643 92,025 96,626 101,458
Beginning Net Operating Assets 156,351 204,112 283,798 381,425 475,256 545,593 572,873 601,517 631,593 663,172 696,331
Residual Income to all Investors 4,520 43,912 50,993 51,716 44,896 30,907 32,452 34,075 35,779 37,567 39,446
Present Value of Residual Investor Income 4,151 37,024 39,479 36,765 29,306 18,525 17,861 17,220 16,603 16,007 15,433
Entity Value 819,645
Less Value of Debt (172)
Less Value of Preferred Stock 0
Forecast Equity Value Before Time Adj. 819,473
Forecasted Value as of Valuation Date 875,027
Less Value of Contingent Equity Claims 0
Value Attributable to Common Equity 875,027
Common Shares Outstanding at BS Date 52,732
Equivalent Shares at Valuation Date 52,732
Forecast Price/Share $16.59
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