The factor risk premiums are in the following table: Portfolio SMB Market index 0.027 HML -0.066 Risk premium 0.062 According to the APT the expected return on a stock is given by the following equation: E(ri) = rf+ PiMRM + BisMBSMB + BiHMI.HML You want to make an analysis on Tesla Inc. stock return. The regression result of Tesla daily return data (Jan '18 - Jun '18, 125 observations) on the above factors is on the following table: COEFFICIENT P-VALUE 0.8478 CONSTANT 0.0184 MARKET 1.0082 0.000 SML -0.0711 0.7273 HML -0.7147 0.0039 R 0.54 Risk free rate in the economy is 0.006. Tesla risk premium is 0.0836 (a) What sort of firm does the firm issuing this security seem to be? | (b) Find the cost of capital of Tesla if Fama-French 3-factor model holds (ignore p-values). The factor risk premiums are in the following table: Portfolio SMB Market index 0.027 HML -0.066 Risk premium 0.062 According to the APT the expected return on a stock is given by the following equation: E(ri) = rf+ PiMRM + BisMBSMB + BiHMI.HML You want to make an analysis on Tesla Inc. stock return. The regression result of Tesla daily return data (Jan '18 - Jun '18, 125 observations) on the above factors is on the following table: COEFFICIENT P-VALUE 0.8478 CONSTANT 0.0184 MARKET 1.0082 0.000 SML -0.0711 0.7273 HML -0.7147 0.0039 R 0.54 Risk free rate in the economy is 0.006. Tesla risk premium is 0.0836 (a) What sort of firm does the firm issuing this security seem to be? | (b) Find the cost of capital of Tesla if Fama-French 3-factor model holds (ignore p-values)