The explicit and implicit costs associated with corporate default are referred to as the ________ costs of a firm.
A)flotation
B)default beta
C)direct bankruptcy
D)financial distress
E)indirect bankruptcy

Question

Quizplus · Accepted Answer

The costs associated with corporate default, both explicit (such as legal fees or default fees) and implicit (such as loss of reputation or loss of customers), are referred to as the financial distress costs of a firm.

The Explicit and Implicit Costs Associated with Corporate Default Are