A firm has outstanding debt of $100 million.Suppose it voluntarily agrees to pay all creditors in full in six periodic installments.This is

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An extension is an agreement in which a borrower is allowed to defer repayment of their debt for a specific period of time, usually with interest. In this case, the firm is agreeing to pay the outstanding debt in full, but over a longer period of time in installments. This is therefore classified as an extension. A composition involves a settlement for less than the full amount owed, which is not the case in this situation. A combination of both is not relevant in this case, and a cram-down is a court-ordered plan of reorganization which is not applicable here either.

A Firm Has Outstanding Debt of $100 Million