Capital Structure

Benefits of Recapitalization

Every company (public or privately held) funds itself with capital obtained through equity and debt. While equity refers to common stock and preferred stock, debt includes long-term borrowing via commercial papers, bonds, debentures, etc. The equation of the company’s capital formation (including equity and debt) is called the capital structure. Suppose a privately held company …

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Private Equity Recapitalization: What is it and how does it work?

Business owners find it very difficult to part from the companies they built. When discussing alternatives to exit their business, they often ask which is better: selling their business stake entirely or continuing to work with the company and benefit from its further growth. They may not know that they need not choose between selling …

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