A System Based on a Capitalistic Market Always Leads to the Equitable

question 57

True/False

A system based on a capitalistic market always leads to the equitable distribution of income.

---

Definitions:

Debt-Equity Ratio

A benchmark ratio illustrating how a company’s assets are financed by shareholders' equity and debt.

M&M II

Modigliani and Miller Proposition II; a theory on capital structure, which states that the value of a firm is independent of its capital structure, under certain assumptions.

Unlevered Cost

It refers to an investment's cost or return that does not consider the effects of borrowing or leverage.

Targeted Cost

A cost management strategy where a product's planned profit and required cost are computed by considering the competitive market price.