Overcapitalization
When a company has too much capital for the needs of its business. Investopedia Says:
You might think that more capital is always better, but this isn't the case. If a business has more money than it can work with, it will be burdened with high interest charges and/or dividend payments. To reduce overcapitalization a company can repay its debt or do a share buyback. Related Terms:
Buy Back
Capitalization
Market Capitalization
Overcollateralization
Undercapitalization
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