RECAPITALIZED Meaning and
Definition
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Recapitalized is a verb that refers to the process of restructuring a company's capital structure by altering its debt-to-equity ratio, usually by injecting additional capital into the business. This can be done through various means, such as issuing new shares, obtaining debt financing, or converting debt into equity.
The objective of recapitalization is to enhance the financial health and stability of a company. By injecting fresh capital, the company can improve its liquidity, strengthen its balance sheet, and reduce the risk of insolvency. Recapitalization can also be undertaken to finance expansion plans, fund acquisitions, or facilitate ownership transition.
When a company is recapitalized, the ownership structure may undergo changes as well. Existing shareholders may have their ownership diluted if new shares are issued, or they may be given the opportunity to obtain additional shares. Creditors, on the other hand, may convert their debt holdings into equity, becoming part owners of the company in the process.
Recapitalization can be a strategic move that allows a financially distressed company to reorganize and reposition itself in a competitive market. By adjusting its capital structure, the company aims to improve its ability to meet financial obligations and foster long-term growth.
In summary, recapitalized refers to the action of restructuring a company's capital structure, typically involving raising additional capital and potentially altering ownership, with the ultimate aim of enhancing financial stability and promoting growth.
Common Misspellings for RECAPITALIZED
Etymology of RECAPITALIZED
The word "recapitalized" is derived from two separate words: "re-" and "capitalize".
The prefix "re-" is of Latin origin, meaning "again" or "back", and it is often added to verbs to indicate repetition, renewal, or reversal. In this case, it indicates a repetition or renewal of capitalization.
The term "capitalize" has its roots in the Latin word "caput", meaning "head". In the field of finance and economics, "capital" refers to financial assets or wealth, particularly funds invested in a business or enterprise. "Capitalize" means to provide or secure funding for a company or enterprise by increasing its capital or financial resources.
Therefore, when you combine the prefix "re-" and the verb "capitalize", you get "recapitalize", which means to provide new capital or financial resources to an enterprise that was previously capitalized.
