ASSIGNMENT 1:

Take a look at Costco’s stock price from Wednesday, February 4, 2015 through Friday, February 6, 2015. Using what we learned in this week’s readings, explain precisely why Costco experienced such a strong drop in price through this particular trading week, especially considering that the broader market (such as the S&P 500 was up substantially). Use terminology and concepts from the text.

Next, find a stock during this past month that experienced a similar situation and outline what happened with specific dates included.

The more analysis you provide, the better. Don’t forget to include vocabulary & concepts from this week’s reading.

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ASSIGNMENT 2:

ABC Drilling has debt with a market value of $200,000 and a yield of 9%. The firm’s equity has a market value of $300,000, its earnings are growing at a 5% rate, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 12%. Under the MM extension with growth, what would ABC Drilling’s total value be if it had no debt?

Show your work for full credit!