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Overcapitalisation (Noun)

Meaning

(business) too much capitalization (the sale of more stock than the business warrants).

Classification

Nouns denoting acts or actions.

Examples

  • The company's overcapitalisation led to a significant dilution of shareholder value and a subsequent decline in stock price.
  • Analysts warned that the startup's overcapitalisation would make it difficult to achieve a sustainable return on investment.
  • The business's overcapitalisation was evident in its bloated balance sheet, which showed a disproportionate amount of equity compared to assets.
  • The company's decision to issue more shares than necessary resulted in overcapitalisation, putting pressure on management to deliver unrealistic returns.
  • Regulators scrutinised the company's overcapitalisation, suspecting that it was a deliberate attempt to inflate the stock price and deceive investors.

Synonyms

  • Overcapitalization

Hypernyms

  • Capitalization

Related Words

  • Overcapitalise (verb)
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