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Data for the risk premium sensitivities (b,s, and h) as well as the beta coefficient for the CAPM of two companies are listed in the
Data for the risk premium sensitivities (b,s, and h) as well as the beta coefficient for the CAPM of two companies are listed in the following table: \begin{tabular}{|l|} \hline C \\ \hline C \\ \hline M \\ \hline \end{tabular} a) Calculate cost of equity for each company using CAPM and Fama French. Risk free rate 1%. (2 marks for each company's Fama French and 1 mark for CAPM) 6 Marks b) In your own words, list two factors that affect cost of equity and the reason(s) for such effect (Except the factors included in CAPM and Fama French concepts and formulas). 4 marks
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