Which One of the Following Statements Concerning Bankruptcy Is Correct

question 4

Multiple Choice

Which one of the following statements concerning bankruptcy is correct?

• A)An indirect cost of bankruptcy is the loss of key employees.
• B)Bondholders have a greater incentive than stockholders to keep a firm from filing for bankruptcy.
• C)Bankruptcy is sometimes used as a means to increase payroll costs.
• D)The assets of a firm tend to increase in value when a firm is in financial distress.
• E)The administrative costs incurred in a bankruptcy are considered indirect bankruptcy costs.

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Definitions:

Instincts

Innate, biologically determined behavior patterns common to all members of a species that are exhibited by all individuals in the absence of learning or experience.

Physiological State

The condition of the body or bodily functions at a given time, taking into account both internal and external factors.

Homeostasis

The body’s tendency to maintain an equilibrium, or steady state.

Homeostasis

The self-regulating process by which biological systems maintain stability while adjusting to changing external conditions.