Financial distress may be more expensive if the:

Question

Quizplus · Accepted Answer

Limited information about the permanency of the shortfall makes it difficult for creditors and investors to assess the firm's ability to recover, which may increase costs associated with financial distress. Additionally, having many different types of creditors and investors can complicate the restructuring process during financial distress, leading to higher costs. The fact that the firm has never entered into bankruptcy before is not directly related to the costs of financial distress.

Financial Distress May Be More Expensive If The