Firm-specific reasons for financial distress include all of the following EXCEPT:
A) large amounts of financial leverage.
B) poor management.
C) economic recession.
D) volatility in earnings.

Question

Quizplus · Accepted Answer

Economic recession is a macroeconomic issue, not a firm-specific reason for financial distress. Firm-specific reasons are directly related to the individual circumstances or decisions of the firm, such as financial leverage, management quality, and earnings volatility.

Firm-Specific Reasons for Financial Distress Include All of the Following