over capitalization definition

over capitalization

Situation where a firm has more capital than it catered-for or needs. Thus, its assets are worth less than its issued share capital, and the earnings are insufficient to pay dividend and interest. This situation is remedied generally by buying back issued shares (stock) or by paying off debt.

over capitalization is in the Accounting & Auditing and Banking, Commerce & Finance subjects.

over capitalization appears in the definition of the following term: buyback

This content can be found on the following page:

http://www.businessdictionary.com/definition/over-capitalization.html