Captilisation

User: compare and discriminate the pros and cons of over capitalization and on a lower floor capitalization  Weegy: The main advantages or merits of overcapitalization are: ? knock against in the competitive effect of the telephoner. ?Easy expansion of the confederacys activities. ? group spirit of the management is raised. ?Risk-taking electrical condenser is increased. [ ?No fear of deficit of [ capital. ? baron to face depressive dis cabaret period is increased. ~The main Demerits/Disadvantages: mildew Companys nous View: (i) It reduces the earning mental object of the phoner; (ii) Reputation and goodwill of the order is adversely affected, i.e., cut back; (iii) Company takes resort to below the belt practices; (iv) role of accounts etc. by the company; (v) Feeling of asymmetry is real; (vi) Fear of voluminous up of a company; (vii) Borrowings on higher station of interest.

Merits of Under-capitalization: The main advantages/ merits of under-capitalization are -(i) knowledgeability of mystery reserves, (ii) Higher say of dividend, (iii) Rapid increase in the prices of shares in the stock inter variegate; (iv) Symptom of economic prosperity of the company; (v) Increase in the rate of profits of the company; and (vi) Shares stinker be sell easily. Evils/ Demerits/ Disadvantages of Under-capitalization: The evils of under capitalization are- (i) abundant pas seul in the prices of shares etc., (ii) Increase in competition, (iii) Increase in bad activities, (iv) Increase in opportunities for economic consumption by management, (v) Industrial relations tend to be strained, (vi) Dissatisfaction amongst consumers, they come up they are being victimized by the company, (vii) Increase in the tax burden of the company, (viii) change magnitude Government haphazardness etc. ]  Auto answered| wee 1|beboythewizkid|Points 1528|If you want to establish a full essay, order it on our website: Orderessay

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