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An indirect cost of bankruptcy is the effect that a potential bankruptcy has on the firm s decisions. The general result is that: An indirect
An indirect cost of bankruptcy is the effect that a potential bankruptcy has on the firms decisions. The general result is that:
An indirect cost of bankruptcy is the effect that a potential bankruptcy has on the firms decisions. The general result is that:
stockholders expropriate value from bondholders by selecting highrisk projects.
the firm will select only allequity financed projects.
the firm will rank all projects and select the project which results in the highest expected firm value.
the firm will always select the lowestrisk project available.
bondholders expropriate value from stockholders by selecting highrisk projects.
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