Thin capitalisation definition

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Thin capitalisation

Thin capitalisation logo #21000 A company is said to be thinly capitalised when its capital is made up of a much greater proportion of debt than equity, i.e. its gearing, or leverage, is too high. This is perceived to create problems for two classes of people: ==Credit risk== If the shareholders have introduced only a nominal amount of paid-up share capital, then the company has...
Found on http://en.wikipedia.org/wiki/Thin_capitalisation
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