Although the Exact Relationship Between a Firm's Degree of Financial

question 47

True/False

Although the exact relationship between a firm's degree of financial leverage and its beta is difficult to estimate, it has been shown both theoretically and empirically that a firm's beta increases with its degree of financial leverage.

---

Definitions:

Gastrovascular Cavity

A central cavity in certain simple organisms, such as cnidarians, serving both digestive and circulatory functions.

Tentacle

Flexible, often elongated appendages found in some animals, like octopuses and jellyfish, used for sensation, locomotion, and feeding.

Cnidarians

Cnidarians are a phylum of aquatic invertebrates that include jellyfish, corals, and sea anemones, characterized by a simple body plan with a mouth surrounded by tentacles.

Gills

Respiratory organs found in many aquatic organisms, used for the exchange of gases (oxygen and carbon dioxide) with the water.