Firms have a difficult time selling equity when it is in financial distress.

Name: Firms have a difficult time selling equity when it is in financial distress.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When a firm is in financial distress, it may have difficulty finding buyers for its equity because investors are typically looking for stable and profitable companies to invest in. Investors may be hesitant to buy equity in a distressed company because they may be concerned about the company's ability to recover and generate returns.

Firms Have a Difficult Time Selling Equity When It Is