Which of the Following Statements Is False

question 82

Multiple Choice

Which of the following statements is false?

• A) Calculating the precise present value of financial distress costs is a relatively straightforward process.
• B) Two key qualitative factors determine the present value of financial distress costs: (1) the probability of financial distress and (2) the magnitude of the costs after a firm is in distress.
• C) Technology firms are likely to incur high costs when they are in financial distress due to the potential for loss of customers and key personnel, as well as a lack of tangible assets that can be easily liquidated.
• D) The magnitude of the financial distress costs will depend on the relative importance of the sources of these costs and is likely to vary by industry.

---

Definitions:

Absolute Standards

Measures or criteria that are fixed and universally applied, regardless of context or situation.

Market Value Ethics

The ethical considerations involved in determining the fairness of prices and valuations in the marketplace.

Ethical Rules Of Conduct

Guidelines that govern the ethical and moral behavior of individuals and organizations in various professions.

Legal Persons

Entities (such as individuals, companies, and organizations) that have legal rights and obligations, including the capacity to enter into contracts, sue, and be sued.