Financial distress does not have a material indirect cost to firms able to avoid bankruptcy or liquidation.

Question

Quizplus · Accepted Answer

Financial distress can have material indirect costs to firms even if they are able to avoid bankruptcy or liquidation. These costs can include increased borrowing costs, loss of reputation and goodwill, decreased employee morale and productivity, and reduced access to credit and financing in the future.

Financial Distress Does Not Have a Material Indirect Cost to Firms