Direct costs of bankruptcy do not include:
A)loss of tax losses.
B)accounting and legal fees.
C)asset liquidation.
D)agency costs.

Question

Quizplus · Accepted Answer

Direct costs of bankruptcy include account and legal fees, asset liquidation, and loss of tax losses. However, agency costs are indirect costs associated with bankruptcy and are incurred due to potential conflicts of interest between different stakeholders such as management, shareholders, and creditors.

Direct Costs of Bankruptcy Do Not Include