Which of these represent indirect costs of financial distress?
I.Court fees paid to a bankruptcy court
II.A firm's supplier requiring payment in cash rather than offering its normal credit terms
III.Cost of a manager's time spent renegotiating the terms of a debt to avoid bankruptcy
IV.Loss of a key employee concerned about job security and the future of the firm
A)I and II only
B)III and IV only
C)I,II,and III only
D)II,III,and IV only
E)I,II,III,and IV

Question

Quizplus · Accepted Answer

Indirect costs of financial distress include actions like suppliers changing credit terms (II), management time spent on renegotiations (III), and loss of key employees (IV). Court fees (I) are direct costs.

Which of These Represent Indirect Costs of Financial Distress