Difference between over and under capitalisation
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OVER CAPITALISATION: A company is said to be overcapitalized, when its total capital (both equity and debt) exceeds the true value of its assets.
UNDER CAPITALISATION: Under-capitalization is just the reverse of over-capitalization. A company is considered to be under-capitalized when its actual capitalization is lower than its proper capitalization as warranted by its earning capacity.
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UNDER CAPITALISATION: Under-capitalization is just the reverse of over-capitalization. A company is considered to be under-capitalized when its actual capitalization is lower than its proper capitalization as warranted by its earning capacity.
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