The explicit and implicit costs associated with corporate default are referred to as the _____ costs of a firm.
A) flotation
B) default beta
C) direct bankruptcy
D) indirect bankruptcy
E) financial distress

Question

Quizplus · Accepted Answer

The explicit and implicit costs associated with corporate default are referred to as the financial distress costs of a firm. These costs include legal fees, loss of reputation, reduced sales, and higher financing costs.

The Explicit and Implicit Costs Associated with Corporate Default Are