Some research has shown that being in financial distress may not be all bad news for an entity because:
A) Investors will see this as an opportunity to buy into a company that can really only improve.
B) Existing managers will want to be released from their contracts allowing new ideas to be employed.
C) There will be no requirement to consider the social costs of retrenching employees because the accounting numbers show it is necessary.
D) It will provide the stimulus to rethink activities that may in turn lead to improved future performance.
E) All of the given answers.

Question

Quizplus · Accepted Answer

Financial distress can serve as a wake-up call for entities to reevaluate and change their activities, which can result in improved future performance.

Some Research Has Shown That Being in Financial Distress May