For a Company to Remain in Business for the Long

question 25

True/False

For a company to remain in business for the long term, cash flow from investing activities and financing activities must generally be positive numbers.

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Definitions:

Levered Firm

A company that utilizes debt financing as a significant portion of its capital structure.

Indirect Bankruptcy Costs

Expenses related to bankruptcy that are not direct costs such as legal and administrative fees, including damage to corporate reputation and loss of business opportunities.

Corporate Default

A failure of a company to fulfill its financial obligations, such as missing a debt payment.