Identify the Following Terms

question 85

Short Answer

Identify the following terms.
-"Four Modernizations"

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Definitions:

Bankruptcy Costs

Expenses and fees incurred during the process of declaring bankruptcy, which may include legal fees, accounting costs, trustee fees, and other associated costs.

Direct Bankruptcy Costs

Expenses directly associated with a company's bankruptcy process, including legal and administrative fees.

Indirect Bankruptcy Costs

Expenses that are not directly tied to the bankruptcy filing process but arise due to the reduced ability to conduct business efficiently, such as lost sales, diminished reputation, and impaired creditworthiness.

Optimal Capital Structure

The most favorable mix of debt and equity financing a firm can use for funding, minimizing the cost of capital and maximizing shareholder value.