Indirect Costs of Financial Distress

question 12

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) include the costs incurred by a firm as it tries to avoid seeking bankruptcy protection.

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Definitions:

Tertiary Circular Reactions

Advanced repetitive actions in infants aged 12-18 months, characterized by experimentation and exploration to achieve desired outcomes.

Sensorimotor Development

Sensorimotor development refers to the stage in early childhood where learning occurs through sensory experiences and manipulating objects.

Secondary Circular Reactions

Repetitive actions in infant development focused on external objects, part of Piaget’s stages of cognitive development.

Object Permanence

The recognition that items persist in existence even when they are not visible, audible, or detectable through other senses.