Question: Cost of common stock equity CAPM Netflix common stock has a beta, b , of 1.2. The risk-free rate is 7%, and the market return

Cost of common stock

equityCAPM

Netflix common stock has a beta,

1.2.

The risk-free rate is

7%,

and the market return is

12%.

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.

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