A firm can affect its beta risk by changing the composition of its assets and by modifying its use of debt financing, but external factors do not have any bearing on a firm's beta.?
Answer the following statement true (T) or false (F)
False
A firm can affect its beta risk by changing the composition of its assets and by modifying its use of debt financing. External factors, such as increased competition within a firm's industry or the expiration of basic patents, can also alter a company's beta. When such changes occur, the required rate of return, r, changes as well. See 8-4: The Relationship between Risk and Rates of Return: The CAPM
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A obvious problem with post audits is that the assumptions driving the original analysis may often be invalidated by changes in the actual operating environment
Indicate whether the statement is true or false
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