Do you believe in CAPM as a proper model to estimate the cost of capital for the project at a firm level? Across chapters 10 to 12, we have studied how the fundamental relationship between returns and risk has been explained by investors optimal choices. Furthermore, CAPM stretches it out to the individual or firm level projects to account for their cost of capital with a remarkably simple equation. However, do you agree that CAPM truly unveils the opportunity costs of capital? Why or why not? Please reconsider the tight connection between the projects risk and market premium and present your comprehensive understanding of how CAPM works as it is, or not.