Which One of the Following Is a Direct Bankruptcy Cost

question 80

Multiple Choice

Which one of the following is a direct bankruptcy cost?

• A)Loss of customer goodwill resulting from a bankruptcy filing
• B)Legal and accounting fees related to a bankruptcy proceeding
• C)Management time spent on a bankruptcy proceeding
• D)Any financial distress cost
• E)Costs a firm spends trying to avoid bankruptcy

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Definitions:

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, including all payments of interest and principal.

Semi-annually

Semi-annually refers to an event or action occurring twice a year, or every six months.

Coupon Rate

The interest rate stated on a bond when it's issued which indicates the percentage of the principal to be paid annually as interest.

Intrinsic Value

The actual, fundamental worth of an asset, calculated based on an objective analysis of underlying factors.