Which of the Following Companies Faces the Problem of Undercapitalization

Multiple Choice

Which of the following companies faces the problem of undercapitalization?

A) A large corporation that has been hit with a major lawsuit because one of its products has a design flaw that has led to serious injuries.
B) An electric utility that has recently experienced a significant increase in the cost of coal and labour.
C) A medium-sized company that has decided to buy out a smaller competitor.
D) A small new company struggling because it has insufficient start-up funds.