Given Realistic Estimates of the Probability and Cost of Bankruptcy

question 19

Multiple Choice

Given realistic estimates of the probability and cost of bankruptcy, the future costs of a possible bankruptcy are borne by:

• A)all investors in the firm.
• B)debtholders only because if default occurs interest and principal payments are not made.
• C)shareholders because debtholders will pay less for the debt providing less cash for the shareholders.
• D)management because if the firm defaults they will lose their jobs.
• E)None of the above.

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Definitions:

Conscientiousness

Refers to a personality trait characterized by organization, dependability, and a strong sense of duty.

Eight Types

This term is too vague without further context but could refer to various classification systems in psychology, such as personality types, without specifying which.

Gardner

Howard Gardner is a developmental psychologist best known for proposing the theory of multiple intelligences, which suggests that intelligence is not a single general ability but a combination of various distinct types of cognitive capabilities.

Emotional

Pertaining to one's feelings or affective states, often influencing mood, behavior, and cognitive processes.