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  • Financial Management / Management Accounting III
  • Directions: Choose the correct option for the given quest...
Multiple choice

Directions: Choose the correct option for the given question: Over capitalization is more dangerous than under capitalization.

  1. True

  2. False

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Over-capitalization leads to lower returns and potential insolvency, while under-capitalization is often easier to correct through additional funding or retained earnings.

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