A firm is in ________ if it is having difficulty meeting its commitments to its creditors such as the bondholders.

Question

Quizplus · Accepted Answer

Financial distress refers to a situation where a firm is having difficulty meeting its financial obligations, such as paying back its creditors. This can be a precursor to bankruptcy or default if the situation is not resolved. Receivership, on the other hand, refers to a legal process where a court appoints a receiver to take control of a company's assets and operations in order to repay its debts.

A Firm Is in ________ If It Is Having Difficulty