Using standard regression analysis in the Excel data provided below, estimate the firm-specific beta:

(RET - RF) = Alpha + Beta (MKTRF).

Calculate the estimated cost of equity capital using the Beta estimate from the previous step.

 Once you finish the data analysis, answer all of the following questions.

1. 1. Conceptually, what are some of the advantages and disadvantages of the Capital Asset Pricing Model (CAPM)? List one advantage and one disadvantage.
2. 2. Open Yahoo! Finance and enter AAPL (Apple's Ticker symbol). Look at the summary page for the beta estimate over the most recent five-year horizon. How close is your estimate to the website's estimate? Which number do you think provides a better estimate of cost of equity capital? Why?
3. 3. What are some of the practical issues that you find in estimating cost of equity capital using CAPM? Briefly describe how you address them.

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A 1 mktrf rf B C D date RET 2 0.084 0.0021 1/31/2019 0.055154 3 0.034 0.0018 2/28/2019 0.044701 4 0.011 0.0019 3/29/2019 0.097026 5 0.0397 0.0021 4/30/2019 0.056436 6 -0.0694 0.0021 5/31/2019 -0.12374 7 0.0693 0.0018 6/28/2019 0.130519 8 0.0119 0.0019 7/31/2019 0.076394 9 -0.0258 0.0016 8/30/2019 -0.01657 10 0.0143 0.0018 9/30/2019 0.072962 11 0.0206 0.0016 10/31/2019 0.110684 12 0.0387 0.0012 11/29/2019 0.077424 13 0.0277 0.0014 12/31/2019 0.098784 14 -0.0011 0.0013 1/31/2020 0.05401 15 -0.0813 0.0012 2/28/2020 -0.11431 16 -0.1339 0.0013 3/31/2020 -0.06976 17 0.1365 04/30/2020 0.155374 18 0.0558 0.0001 5/29/2020 0.084956 19 0.0246 0.0001 6/30/2020 0.147386 20 0.0577 0.0001 7/31/2020 0.165132 21 0.0763 0.0001 8/31/2020 0.216309 22 -0.0363 0.0001 9/30/2020 -0.10253 23 -0.021 0.0001 10/30/2020 -0.06001 24 0.1247 0.0001 11/30/2020 0.09549 25 0.0463 0.0001 12/31/2020 0.114574 26 -0.0003 0.0001 1/29/2021 -0.0055 27 0.0278 0 2/26/2021 -0.07953 28 0.0308 0 3/31/2021 0.00734 29 0.0493 0 4/30/2021 0.076218 30 0.0029 0 5/28/2021 -0.05043 A 1 mktrf rf B C D date RET 2 0.084 0.0021 1/31/2019 0.055154 3 0.034 0.0018 2/28/2019 0.044701 4 0.011 0.0019 3/29/2019 0.097026 5 0.0397 0.0021 4/30/2019 0.056436 6 -0.0694 0.0021 5/31/2019 -0.12374 7 0.0693 0.0018 6/28/2019 0.130519 8 0.0119 0.0019 7/31/2019 0.076394 9 -0.0258 0.0016 8/30/2019 -0.01657 10 0.0143 0.0018 9/30/2019 0.072962 11 0.0206 0.0016 10/31/2019 0.110684 12 0.0387 0.0012 11/29/2019 0.077424 13 0.0277 0.0014 12/31/2019 0.098784 14 -0.0011 0.0013 1/31/2020 0.05401 15 -0.0813 0.0012 2/28/2020 -0.11431 16 -0.1339 0.0013 3/31/2020 -0.06976 17 0.1365 04/30/2020 0.155374 18 0.0558 0.0001 5/29/2020 0.084956 19 0.0246 0.0001 6/30/2020 0.147386 20 0.0577 0.0001 7/31/2020 0.165132 21 0.0763 0.0001 8/31/2020 0.216309 22 -0.0363 0.0001 9/30/2020 -0.10253 23 -0.021 0.0001 10/30/2020 -0.06001 24 0.1247 0.0001 11/30/2020 0.09549 25 0.0463 0.0001 12/31/2020 0.114574 26 -0.0003 0.0001 1/29/2021 -0.0055 27 0.0278 0 2/26/2021 -0.07953 28 0.0308 0 3/31/2021 0.00734 29 0.0493 0 4/30/2021 0.076218 30 0.0029 0 5/28/2021 -0.05043