The term "financial distress costs" includes which of the following?
I.Direct bankruptcy costs
II.Indirect bankruptcy costs
III.Direct costs related to being financially distressed,but not bankrupt
IV.Indirect costs related to being financially distressed,but not bankrupt

Question

Quizplus · Accepted Answer

Financial distress costs encompass both the direct and indirect costs associated with bankruptcy as well as the direct and indirect costs related to being financially distressed but not necessarily bankrupt. This includes legal and administrative fees (direct bankruptcy costs), the impact on business operations and relationships (indirect bankruptcy costs), and costs incurred to avoid bankruptcy (direct and indirect costs of financial distress).

The Term "Financial Distress Costs" Includes Which of the Following