Netflix plan to achieve its long-run objective

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Netflix IPO Questions
(Due in Class Monday, February 15)
1. What is Netflix's long-run objective? How does Netflix plan to achieve its long-run objective? How would you assess Netflix's performance to date?
2. Why does McCarthy use a subscriber model to forecast Netflix's future cash flow requirements? What are the basic elements of a subscriber model?
3. Construct an annual subscriber model for Netflix that can be used to forecast the expected cash flows for a new subscriber over the next five years. What is the value of a new Netflix subscriber? (Assume a discount rate of 20%.) Based on your analysis, should Netflix be acquiring new subscribers?
4. Assuming that Netflix does not change its current business model, what is the value of NetFlix.com? What changes, if any, would you suggest be made to its existing business model? What are the value implications of these changes?

Reference no: EM13671407

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