Business Studies, asked by LearnSomething7165, 11 months ago

Over capitalization is as dangerous as under capitalization, do you agree? Explain?

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Answered by Anonymous
1

Answer:

A company is said to be overcapitalized when the aggregate of the par value of its shares and debentures exceeds the true value of its fixed assets.In other words, over capitalisation takes place when the stock is watered or diluted. ... If the earnings are lower than the expected returns, it is overcapitalised.

Explanation:

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