Costs of financial distress include all of the following except:
A) direct costs.
B) bankruptcy costs.
C) opportunity costs.
D) losses prior to bankruptcy.

Question

Quizplus · Accepted Answer

Bankruptcy costs are a subset of the broader category of financial distress costs, not an exception. Financial distress costs include direct costs (such as legal and administrative expenses), indirect costs (such as lost sales, customers, or employees), and opportunity costs (such as lost investment opportunities). Losses prior to bankruptcy are also considered part of financial distress costs.

Costs of Financial Distress Include All of the Following Except