September 19, 2019

What are the remedies for Under Capitalisation?

The remedies for under capitalisation are:

  1. Increasing the par value or number of equity shares – leads to decrease in rate of EPS.
  2. Capitalise the earnings by issuing bonus shares to the equity shareholders.
  3. Where under capitalisation is due to insufficiency of capital, more shares and debentures may be issued to the public.

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