Netflix, Inc. has a beta of 2.94. If the market return is expected to be 13.70...
Netflix, Inc. has a beta of 2.94. If the market return is expected to be 13.70 percent and the risk-free rate is 6.20 percent, what is Netflix's risk premium? (Round your answer to 2 decimal places.)
Homework Answers
Expected return on stock = 6.20%
+ 2.94 * (13.70% - 6.20%)
Expected return on stock = 6.20% + 22.05%
Expected return on stock = 28.25%
Risk premium on stock = Expected return on stock - Risk free rate
Risk premium on stocks = 28.25% - 6.20% = 22.05%
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