Capitalization Question:
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Tell me what remedies are available for companies to overcome undercapitalization?

Answer:

Remedies are the solutions which are available for the companies to overcome the problem of undercapitalization this can be done by using two factors. These factors are as follows:-

1) Splitting up the shares will reduce the dividend per share and don’t give more to one only but equally to everyone and the high earning can be utilized properly.

2) Issue bonus shares to the company members who are currently associated with the company as well as the shareholders stake by doing this both the dividend per share and earnings per share will reduce.

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Explain Balanced Capitalization?Explain what are the effects of undercapitalization on following parties?

a.)Company
b.)Shareholders
c.)Consumers
d.)Society