Business Studies, asked by anuroy6254, 10 months ago

What do you mean by over-capitalisation?

Answers

Answered by xxiTzSiLeNtKiLlErxx

Overcapitalization occurs when a company has issued more in debt and equity than its assets are worth. If this is the case, the market value of the company is less than the total capitalized value of the company.

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Answered by lxm1857

Explanation:

overcapitalisation refers to an economic phenomena whereby the valuation/price of an asset is superior to its 'real' value, however difficult to define, therefore putting a strain on attempts to obtain a reasonable return on investment.

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