Indirect Costs of fiNancial Distress

question 5

Multiple Choice

Indirect costs of financial distress:

• A)effectively limit the amount of equity a firm issues.
• B)serve as an incentive to increase the financial leverage of a firm.
• C)include direct costs such as legal and accounting fees.
• D)tend to increase as the debt-equity ratio decreases.
• E)include the costs incurred by a firm as it tries to avoid seeking bankruptcy protection.

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Definitions:

Pro-New Deal Decisions

Judicial rulings in favor of the policies and programs implemented under President Franklin D. Roosevelt's New Deal, aimed at recovering from the Great Depression.

New Deal Relief Programs

Public works and assistance programs initiated under President Franklin D. Roosevelt’s administration to combat the effects of the Great Depression in the 1930s.

Economic Survival

The ability of individuals, households, businesses, and countries to maintain financial stability and meet basic needs over time.

HR Forecasting

The process used by Human Resources to predict an organization’s future labor needs and determine how to best fill those needs.