Problem
Teresa, the owner of Stack Brewery, recently met with a consultant who advised the firm that it was "under-leveraged" and should be "recapitalized". She had always financed the firm entirely with her own funds and having feigned comprehension at their meeting, wondered exactly this could mean.
• Briefly explain what condition(s) would be necessary to create firm value by swapping equity for debt (borrowing money against the firm's assets and paying it to herself as a dividend)