Do stakeholders and shareholders benefit from capital restructuring? Why or Why not?© BrainMass Inc. brainmass.com July 22, 2018, 8:29 pm ad1c9bdddf
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1. Do stakeholders and shareholders benefit from capital restructuring? Why or Why not?
Capital restructuring is when a company alters the capital structure of a firm. It is often in reaction to the changed business conditions, or as a means to fund the firm's growth plans (http://www.businessdictionary.com/definition/capital-restructuring.html).
Because the capital structure is the framework of different types of financing employed by a firm to acquire resources necessary for its operations and growth, growth usually means increased profits. Capital structure of the firm commonly comprises of stockholders' investments (equity capital) and long-term loans (loan capital), but, unlike financial structure, does not include short-term loans (such as overdraft) and liabilities (such as trade credit) (http://www.businessdictionary.com/definition/capital-structure.html). ...
This solution explains whether or not stakeholders and shareholders benefit from capital restructuring, including why or why not.