The adjusted beta is always lower than the unadjusted beta.

True

False

QUESTION 11

One method of estimating the growth rate of a company is to use the retention growth model, where the growth rate (=g) is estimated as the ROEmultiplied by the plowback ratio.

True

False

QUESTION 12

The operating leverage is the extent to which fixed-income securities are used in a firm's capital structure.

True

False