You are currently considering an investment in a project in the energy sector. The investment has the same riskiness as Exxon Mobil stock (ticker: XOM). Using the data in Table 1 shown here in Table 1 and Table two. Calculate the cost of capital using the FFC factor specification if the current risk-free rate is 3.0% per year.

Table 1: Estimated Factor Betas, 2005-2015
Factor	MSFT		XOM		GE
MKT	1.06		0.780.78		1.29
SMB	minus0.45		negative 0.620.62		minus0.39
HML	minus0.12		0.210.21		0.82
PR1YR	minus0.06		0.320.32		minus0.22

Table 2: FFC Portfolio Average Monthly Returns, 1927-2015
Factor Portfolio	Average Monthly Return (%)	95% Confidence Band (%)
MKT minus r Subscript f nbspMKTrf	0.650.65	plus or minus0.33
SMB	0.230.23	plus or minus0.19
HML	0.390.39	plus or minus0.21
PR1YR	0.680.68	plus or minus0.29