Which of the following states of financial distress would be considered the most troubling for an investor or creditor?
A) failing to make a required interest payment on time
B) paying an accounts payable after the billing date
C) restructuring debt
D) defaulting on a principal payment on debt

Question

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Defaulting on a principal payment on debt would be considered the most troubling for an investor or creditor as it indicates a serious inability to fulfill financial obligations and may lead to bankruptcy or legal action. Failing to make a required interest payment on time, paying an accounts payable after the billing date, and restructuring debt, while not desirable, are not as severe as defaulting on a principal payment.

Which of the Following States of Financial Distress Would Be