I am doing an exam review and just have some questions Financial distress costs: Select one: -,May include impaired service to customers...

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Finance

Iam doing an exam review and just have some questions

Financial distresscosts:
Selectone:
-,May includeimpaired service to customers and suppliers and lost oftrust
- Tend to offset theadvantages of debt finance
- Might lower thevalue of the firm
- All of theabove.
Keeping in mindthat increasing the value of a firm is the goal of financialmanagement, the trade-off theory shows that:
Selectone:
- The corporate leverage decision involves a trade-off between thetax benefits of debt and the costs of financialdistress
- There is an optimal amount of debt for any individualfirm
- As more and more debt is added, the present value of the financialdistress costs rises at a higher rate than the present value of thetax shield
- All of the above

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Financial distress is a condition when promises to creditors of the company are broken or honored with difficulty If this situation cannot be relieved it can lead to Bankruptcy Financial distress may also lead See Answer

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Iam doing an exam review and just have some questionsFinancial distresscosts:Selectone:-,May includeimpaired service to customers and suppliers and lost oftrust- Tend to offset theadvantages of debt finance- Might lower thevalue of the firm- All of theabove.Keeping in mindthat increasing the value of a firm is the goal of financialmanagement, the trade-off theory shows that:Selectone:- The corporate leverage decision involves a trade-off between thetax benefits of debt and the costs of financialdistress- There is an optimal amount of debt for any individualfirm- As more and more debt is added, the present value of the financialdistress costs rises at a higher rate than the present value of thetax shield- All of the above