2) You are evaluating a new project for the firm you work for, a publicly listed firm. The firm typically finances new projects using the same mix of financing as in its capital structure, but this project is in a different industry than the firm's core business. Describe the procedure for estimating the appropriate discount rate (cost of capital) to be used in the evaluation of the project.

3) On October 6, 2020, the US President abruptly tweeted that the White House is pulling out of ongoing negotiations on a new stimulus bill intended to address covid19 pandemic's impact on the economy. All stock market indices immediately dropped by more than 1%. Was this movement consistent with market efficiency? Why, or why not?