Indirect Costs of Financial Distress

question 31

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) tend to increase as the debt-equity ratio decreases.
• E) include the costs incurred by a firm as it tries to avoid seeking bankruptcy protection.

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Definitions:

Misbehavior

Actions or conduct, especially of children, that is considered inappropriate or out of accord with societal norms or expectations.

Family Meetings

Planned gatherings of family members to discuss issues of importance to the family, make decisions, and improve communication and relationships.

Household Rules

Guidelines set by individuals or families to manage behavior and responsibilities within the home environment.

Insecure Attachment

A type of emotional bond formed in early childhood that can lead to difficulties in relationships due to lack of confidence in the availability of close others.