Which One of the Following Statements Concerning Bankruptcy Is Correct

question 107

Multiple Choice

Which one of the following statements concerning bankruptcy is correct?

• A) The administrative costs incurred in a bankruptcy are considered indirect bankruptcy costs.
• B) Bondholders have a greater incentive than stockholders to keep a firm from filing for bankruptcy.
• C) Bankruptcy is sometimes used as a means to increase payroll costs.
• D) The assets of a firm tend to increase in value when a firm is in financial distress.
• E) An implicit cost of bankruptcy is the loss of key employees.

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