The implicit costs associated with corporate default, such as lost sales, are the __________ of the ﬁrm.
A) Flotation costs.
B) Default beta coeﬃcients.
C) Direct bankruptcy costs.
D) Indirect bankruptcy costs.
E) Default risk premium.

Question

Quizplus · Accepted Answer

Indirect bankruptcy costs refer to the costs associated with lost sales and other implicit costs resulting from corporate default.

The Implicit Costs Associated with Corporate Default, Such as Lost