answersLogoWhite

0


Best Answer

Wow, straight out of the capital structure case on Kleen Kar, case 9.

Control would clearly be an issue. There is a danger of loss of control if the company does not use enough debt (through a leveraged buyout), but there is also a danger of loss of control (through bankruptcy) if it uses too much debt. However it is impossible to reach a conclusion as to how control should affect the decision.

User Avatar

Wiki User

14y ago
This answer is:
User Avatar

Add your answer:

Earn +20 pts
Q: How do control issues affect the capital structure decision?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

Factors affecting capital structure?

There are many factors that can affect capital structure. The most common factor is a downturn in the economy. A decrease in sales can also affect the capital structure.


Discuss the factors that affect span of control?

The structure of a business affects the span of control. The reporting hierarchy affects the span of control within an organization.


What factors affect region location decision?

What factors affect region location decision?


What are the loads that would affect the structure of a sail boat?

Stupid loads would affect a structure!


Why does capital budgeting look at cash flows and not net income?

Affect of net income is hard to determine due to any specific assets that's why capital budgeting decision making involves cash flows to determine cost and benefit analysis.


How do structure and function affect how molecules work?

structure


How does an increase in revenue affect working capital?

Revenue affects the capital by decreasing the capital.


Does penicillin affect birth control?

Penicillin does not affect birth control.


How change demographics affect marketing decision?

how domographic affect marketing how domographic affect marketing


How did people's experiences affect their decision to take sides in the American Revolution?

How did people's experiences affect their decision to take sides in the American revolution?


How does capital gains affect social security?

Capital gains are not considered wages. Therefore, they have no affect on eligibility of social security.


What are the sources of political perspective?

Assuming you are referring to the political perspective of organizations. The political perspective focuses on four aspects of the organizations: influence, interest, conflict and decision makingInfluence structure:Which team has more influence and whyStability of the influence structure (does it and how does it change)Does the influence structure encourage or discourage contributions (a helping or hindering structure)What methods of decision making and conflict resolution are present in the organization (majority rule, dictatorship, consensus, etc)Interests:What are the differing interests and how does that affect the companyTrade-off that are the results of the differing interestsConflict: How often are there conflict and what causes them to come about?How are these conflicts resolved (by force, negotiation, etc)Decision making:Which team has more influence and whyStability of the influence structure (does it and how does it change)Does the influence structure encourage or discourage contributions (a helping or hindering structure)What methods of decision making and conflict resolution are present in the organization (majority rule, dictatorship, consensus, etc)