Which one of the following terms applies to the costs incurred by a firm that is trying to avoid filing for bankruptcy?
A)Indirect bankruptcy costs
B)Direct bankruptcy costs
C)Static theory cost
D)Optimal capital structure cost
E)Reorganization costs

Question

Quizplus · Accepted Answer

Indirect bankruptcy costs refer to the expenses a firm incurs to avoid bankruptcy, such as restructuring efforts, loss of sales, or damage to reputation.

Which One of the Following Terms Applies to the Costs