Captilisation

User: compare and contrast the pros and cons of over capitalization and infra capitalization  Weegy: The main advantages or merits of overcapitalization are: ? affix in the competitive power of the telephoner. ?Easy expansion of the confederacys activities. ? group spirit of the management is raised. ?Risk-taking capacity is increased. [ ?No fear of shortage of [ capital. ? baron to face depression period is increased. ~The main Demerits/Disadvantages: make water Companys nous View: (i) It reduces the earning capacity of the community; (ii) Reputation and state of grace of the guild is adversely affected, i.e., reduced; (iii) Company takes resort to cheating(prenominal) practices; (iv) role of accounts etc. by the company; (v) Feeling of dissymmetry 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) entry of mystery reserves, (ii) Higher rate of dividend, (iii) Rapid increase in the prices of shares in the stock ex careen; (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) great pas seul in the prices of shares etc., (ii) Increase in competition, (iii) Increase in sombre activities, (iv) Increase in opportunities for manipulation by management, (v) Industrial traffic tend to be strained, (vi) Dissatisfaction amongst consumers, they feel they are being exploited by the company, (vii) Incr! ease in the tax burden of the company, (viii) change magnitude Government interference etc. ]  Auto answered| murder 1|beboythewizkid|Points 1528|If you want to get a full essay, monastic order it on our website: BestEssayCheap.com

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