b. Because your company is smaller than average and more successful than average

(that is, it has a low book-to-market ratio), you think the Fama-French threefactor model might be more appropriate than the CAPM. You estimate the additional coefficients from the Fama-French three-factor model: The coefficient for the size effect, ci, is 0.7, and the coefficient for the book-to-market effect, di, is −0.3. If the expected value of the size factor is 5% and the expected value of the book-to-market factor is 4%, what is the required return using the Fama-French three-factor model?