Part a) The below data is for an ASX listed company, Metacash. Calculate cost of equity using both CAPM and Fama French methods. Premiums: Market risk premium 7.00% Size risk premium 2.55% Market to book risk premium 3.81% Risk Free Rate 4.30% Coefficients: b 1.4450 s -0.998 h 1.2232 CAPM beta 1.5000 5 Marks Cost of equity Fama French method: 1.4450 x 7% + (-0.998) x 2.55% + 1.0776 x 4.40% + 4.30% = 0.1661154 = 16.61% CAPM: 4.30% + 1.500 x 7%= 0.148 =14.8% Part b) Discuss step by step the implications of calculating Metacash cost of equity using CAPM (instead of Fama French) on the companys valuation and share price.