“One shortcoming of the multifactor APT is that it gives no guidance concerning the determination of the relevant risk factors or their risk premiums”. Briefly explain how does the Elton, Gruber and Mei (1994) approach address that shortcoming and transforms the multifactor APT model into a useful technique for finding the cost of capital.
Using your own words to write a eassy of 200~300 words, and your own example.