3. You work for Microsoft Corporation (ticker: MSFT) and you are considering whether to develop a new software product. The risk of the investment is the same as ther ko the com pany Factor Portfolio MSFT Factor Beta Estimate SMB HML PRIYR Average Monthly Return (%) 0.65 0.23 0.39 0.68 1.06 0.12 0.45 0.06 a. Using the information provided above, calculate the cost of capital using the FFC specification if the current risk free interest rate is 3% per year. [15 points] Microsoft's CAPM beta over the same time period was 0.92. What cost of capital would you estimate using the CAPM? [15 points b