what forms does recapitalization take 
companies can swap debt for equity or vice versa one version of equity replacing debt in the capital structure is equity recapitalization this is when a company issues stock to buy back debt securities increasing its proportion of equity capital compared with its debt capital one version of debt replacing equity in the capital structure is when a company issues debt and uses the cash to buy back shares or issue dividends the business thus recapitalizes by increasing the proportion of debt in the capital structure the bottom linerecapitalization is restructuring a business s debt and equity mixture the purpose is to stabilize a company s capital structure it mainly involves exchanging one financing form for another 