When a firm uses at least some debt in its capital structure, its rate of return on equity will be higher than its rate of return on assets by a factor equal to the equity multiplier. For example, suppose a firm has 50 percent debt, and its return on assets (ROA) is 10 percent. Under these conditions, the equity multiplier will be 2.0 and the rate of return on equity will be 20 percent Therefore, we can generalize from this example and conclude that any increase in the debt ratio will increase both the equity multiplier and the rate of return on equity TRUE FALSE