If a Reputation for Bad Service Would Ruin a Restaurant

question 7

Multiple Choice

If a reputation for bad service would ruin a restaurant, the owner of the restaurant cannot afford to hire

• A) good workers
• B) bad workers
• C) any workers

Distinguish between the direct and indirect costs of bankruptcy.

Grasp the concept of the optimal capital structure and its relation to bankruptcy costs and firm value.

Understand the financial distress costs and their impact on firm value.

Identify and calculate the tax shield benefit of debt.

---

Definitions:

Saber-toothed Cat

An extinct group of predatory mammals known for their long, curved, saber-shaped canine teeth, prevalent during the Pleistocene epoch.

Gym Membership

A subscription-based service granting access to a facility with exercise equipment and sometimes classes for physical fitness.

North American Species

Refers to animal or plant species that are native to or predominantly found in North America.

Proposed Bill

A draft of a law presented to a legislative body for approval.