Capital rationing
Capital rationing is a phenomenon that occurs when management places a constraint on the size of the firm's capital budget during a particular period.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Capital rationing. Occurs when management places a constraint on the size of the firm's capital budget during a particular period.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Capital rationing. The situation in which a firm can raise only a specified, limited amount of capital regardless of how many good projects it has.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
