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1. Explain what is meant by indirect financial distress costs? How do they impact the value of the firm? (40 words) 2. Explain why an

1. Explain what is meant by indirect financial distress costs? How do they impact the value of the firm? (40 words)

2. Explain why an investor in a company that just announced an increase in dividend may not be surprised to see the share price fall. (40 words)

3. Explain why a long position in a put option can only lead to limited gains. Give a practical example. (40 words)

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