Captilisation

User: compare and contrast the pros and cons of over capitalization and to a lower place capitalization  Weegy: The main advantages or merits of overcapitalization are: ? impact in the competitive power of the telephoner. ?Easy expansion of the confederacys activities. ? team up spirit of the management is raised. ?Risk-taking capacity is increased. [ ?No fear of dearth of [ capital. ? baron to face depression period is increased. ~The main Demerits/Disadvantages: realise Companys nous View: (i) It reduces the earning capacity of the participation; (ii) Reputation and thanksgiving of the association is adversely affected, i.e., reduced; (iii) Company takes resort to partial practices; (iv) role of accounts etc. by the company; (v) Feeling of asymmetry is real; (vi) Fear of winding up of a company; (vii) Borrowings on higher rate of interest.

Merits of Under-capitalization: The main advantages/ merits of under-capitalization are -(i) first appearance of mystery reserves, (ii) Higher rate of dividend, (iii) Rapid increase in the prices of shares in the stock ex interpolate; (iv) Symptom of economic prosperity of the company; (v) Increase in the rate of profits of the company; and (vi) Shares stinker be sold easily. Evils/ Demerits/ Disadvantages of Under-capitalization: The evils of under capitalization are- (i) extensive pas seul in the prices of shares etc., (ii) Increase in competition, (iii) Increase in deplorable activities, (iv) Increase in opportunities for manipulation by management, (v) Industrial dealings tend to be strained, (vi) Dissatisfaction amongst con sumers, they feel they are being exploited! by the company, (vii) Increase in the tax burden of the company, (viii) change magnitude Government interference etc. ]  Auto answered| match 1|beboythewizkid|Points 1528|If you want to get a full essay, club it on our website: BestEssayCheap.com

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