Which of the Following Is the Best Definition of fiNancial

question 103

Multiple Choice

Which of the following is the best definition of financial distress costs?

• A) A legal proceeding for liquidating or reorganizing a business. Also, the transfer of some or all of a firm's assets to its creditors.
• B) The direct and indirect costs associated with going bankrupt or experiencing financial distress.
• C) The equity risk that comes from the financial policy (i.e., capital structure) of the firm.
• D) The use of personal borrowing to change the overall amount of financial leverage to which the individual is exposed.
• E) The difficulties of running a business that is experiencing financial distress.

---

Definitions:

Depressive Symptoms

Manifestations of depression that can include a persistent sad or empty mood, feelings of hopelessness, and a lack of energy or interest in life.

Anxiety Symptoms

Manifestations of anxiety, including persistent nervousness, worry, and physical symptoms like increased heart rate, sweating, trembling, dizziness, or trouble concentrating.

Persistent Complex Bereavement Disorder

A disorder characterized by an extended period of grief and mourning that disrupts daily functioning.

Acute Stress Disorder

Disorder similar to posttraumatic stress disorder but occurs within 1 month of exposure to the stressor and does not last more than 4 weeks; often involves dissociative symptoms.