Below Are Various States of Financial Distress

question 21

Multiple Choice

Below are various states of financial distress:
Defaulting on a principal payment on debt
Restructuring debt
Liquidating a firm
Filing for bankruptcy
Failing to make a required interest payment on time
What is the order of increasing gravity that analysts typically consider when assessing credit risk and bankruptcy risk according to a continuum of financial distress?

• A) 5, 1, 2, 3, 4
• B) 5, 2, 1, 4, 3
• C) 1, 5, 2, 4, 3
• D) 1, 5, 2, 3, 4

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Definitions:

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