Question
On Nov 12, 2019, WSJ published an article titled Biggest U.S. Milk Company Dean Foods Files for Chapter 11 Bankruptcy. All of the following represent
On Nov 12, 2019, WSJ published an article titled Biggest U.S. Milk Company Dean Foods Files for Chapter 11 Bankruptcy. All of the following represent problems the firm might face going forward because of the financial distress, EXCEPT:
A: During the process, the firm might face more Empire Building problems as the firm has a lot of extra cash to be wasted
B: During the process, the firm might be unable to raise equity to invest in NPV>0 projects given that managers respond to equity holders incentives
C: During the process, the firm might lose some of its best employees as they search for less risky job opportunities
D: During the process, the firm might have less balance sheet space to raise debt, and thus might face high issuance costs when trying to finance projects
E: During the process, the firm might sell some of its assets at a value below what they would be worth to the firm in the absence of financial distress
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