Custer's Has Bonds Outstanding with a Face Value of $98,000

question 31

Multiple Choice

Custer's has bonds outstanding with a face value of $98,000 that are selling at par.It also has 12,000 shares of stock outstanding that are selling for $25.90 a share.The all-equity value of the firm is $398,000.The tax rate is 35 percent.By what amount has the value of the firm been decreased by the expected bankruptcy costs? Assume there are no other claims on the firm.

• A)$21,300
• B)$18,900
• C)$23,500
• D)$0
• E)$20,750

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Definitions:

Insecure-avoidant Attachment

A type of attachment style identified in children who tend to avoid close contact with their caregivers and do not seek much comfort or attention from them.

Disorganized-disoriented Attachment

A type of attachment pattern seen in some children, characterized by a lack of clear attachment behavior and confusion around caregivers.

Insecure-resistant Attachment

A type of attachment characterized by anxiety and uncertainty in relationships, where individuals are overly dependent and struggle with trust and dependency.

Securely Attached

A type of attachment style identified in psychology where individuals feel confident and secure in their relationships.