Page 20 - SCS May 2018 - Day 1 Suggested Solutions

CIMA MAY 2018 – STRATEGIC CASE STUDY

Finally, both companies are paying the same interest rate (based on year end debt) of 3.5% which
would appear to be a reasonably low rate.

Tutorial note: Again, as a general comparison the equivalent figures for Netflix for the year to
31 December 2017, are as follows:

Gearing 64.47%
Interest cover 3.5
Interest rate on debt 3.7%

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