The current academic consensus regarding the relevance of bankruptcy costs on capital structure decisions is that

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The current academic consensus is that expected bankruptcy costs for large, healthy firms are relatively small and can be ignored when determining their capital structures. This is because these firms are less likely to end up going bankrupt due to their size and financial stability. However, smaller firms with less established financial positions may need to consider bankruptcy costs when making capital structure decisions. The academic consensus is that expected bankruptcy costs for large, healthy firms are small and probably can be ignored when determining these firms' capital structures. This is because the costs of bankruptcy for these firms are relatively low due to the ability of large firms to negotiate favorable restructuring terms and the fact that bankruptcy for these firms is a rare event.

The Current Academic Consensus Regarding the Relevance of Bankruptcy Costs