l. Suppose you are given the following information: The beta of a company, bi, is 0.9; the risk-free rate, rRF, is 6.8%; and the expected market premium, rM − rRF, is 6.3%. Because your company is larger than average and more successful than average (that is, it has a lower book-to-market ratio), you think the Fama-French three-factor 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 −0.5, and the coefficient for the book-to-market effect, di, is −0.3. If the expected value of the size factor is 4% and the expected value of the book-to-market factor is 5%, then what is the required return using the Fama-French three-factor model? (Assume that ai = 0.0.) What is the required return using CAPM?