Limiting a company's new investments, either by setting a cap on parts of the capital budget or by using a higher cost of capital when weighing the merits of potential investments. This might happen when a company has not enjoyed good returns from investments in the recent past. Capital rationing also could take place if a company has excess production capacity on hand.
Related information about capital rationing:
- Capital Rationing Definition | Investopedia
The act of placing restrictions on the amount of new investments or projects undertaken by a company. This is accomplished by imposing a higher cost of capital ...
- What is Capital Rationing?
Capital rationing is the acquisition of new investments based on factors like the performance of other capital investments and the...
- Capital Rationing - Financial Dictionary - The Free Dictionary
Placing limits on the amount of new investment undertaken by a firm, either by using a higher cost of capital, or by setting a maximum on the entire capital budget ...
- Capital Rationing
Mar 11, 2010 ... Capital rationing is technique which is used with capital budgeting techniques. Capital rationing technique is used when company has limited ...
- What is capital rationing? definition and meaning
Definition of capital rationing: Limiting a company's new investments, either by setting a cap on parts of the capital budget or by using a higher cost of capital ...
- How to Solve Conflicts Involving Capital Rationing | Chron.com
Capital rationing is a method companies use to weigh different investment options. All firms have money set aside for new investments. If a firm is presented with ...
- What Is Capital Rationing? - Financial Web
Capital rationing is a strategy used by organizations attempting to limit the costs of their own investments. Typically, a company engaging in capital rationing has ...
- Define Capital Rationing | eHow.com
Define Capital Rationing. Capital rationing is a business decision to limit the amount available to spend on new investments or projects. The practice describes ...