Financial Distress Can Be Best Described by Which of the Following

question 19

Multiple Choice

Financial distress can be best described by which of the following situations in which the firm is forced to take corrective action?

• A) Cash payments are delayed to creditors.
• B) The market value of the stock declines by 50%.
• C) The firm's operating cash flows are insufficient to pay current obligations.
• D) Cash distributions are eliminated because the board of directors considers the surplus account to be low.