Restructuring capital toward debt can contribute to shareholder value, but it can also act to decrease shareholder value.

Question

Quizplus · Accepted Answer

Restructuring capital to focus on debt can lead to lower interest payments and higher cash flow, which can increase shareholder value. However, taking on too much debt can be risky and result in financial distress, which can ultimately decrease shareholder value. Therefore, it depends on the specific circumstances of the company and how the debt restructuring is executed.

Restructuring Capital Toward Debt Can Contribute to Shareholder Value, but It