One of the indirect costs of bankruptcy is the effect that a potential bankruptcy has on the firm's decisions. The general result is that:
A) the firm will rank all projects and select the project which results in the highest expected firm value.
B) bondholders expropriate value from stockholders by selecting high-risk projects.
C) stockholders expropriate value from bondholders by selecting high-risk projects.
D) the firm will always select the lowest-risk project available.
E) the firm will select only all-equity financed projects.
C) stockholders expropriate value from bondholders by selecting high-risk projects.
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Identify five companies that in your opinion have failed to change with time and have either pulled out of the marketplace or continue in it as laggards.
What will be an ideal response?
The U.S. Supreme Court's holding in Ward's Cove Packing v. Atonio
a. differed from the holding in Griggs v. Duke Power Co. partly because the Court was more conservative at the time Ward's Cove was decided. b. upheld the ruling in Griggs v. Duke Power Co. c. found that overt racial discrimination existed. d. set forth a "business necessity" requirement for employment hiring practices.
Erik and Janessa are considering a member for the founding team who has superior programming skills for their new software-related product. His successful programs are numerous and well known. They know that they want to expand to other products, and his experience would be valuable. In a networking discussion, the programmer stated that he was good at what he did and that working on Erik and Janessa’s software would be “as good as any.” Erik and Janessa felt that that was a sign that he was willing to be a founder. Discuss the advantages and disadvantages of adding him to the team.
What will be an ideal response?
No attempt is made to estimate bad debts expense under the direct write-off method of accounting for uncollectible accounts receivable.
Answer the following statement true (T) or false (F)