20. When ROIC equals the cost of capital, there is no relationship between growth and value. a. True b. False Answer: 21. Leverage measures the company's ability to meet obligations over the long term. a. True b. False Answer: 22. The explicit forecast period must be long enough for the company to reach a steady state. Which of the following is NOT a desirable property of that steady state? 2. The growth rate rises above the required return on capital. b. The company earns a constant rate of return on existing capital. c. The company earns a constant rate of return on new capital invested. d. The company reinvests a constant proportion of its operating profits into the business each year. Answer: 23. A/ bottom-up approach for forecasting revenues relies on projections of customer demand. a. True b. False Answer: BP - DEPP