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Q1. Bankruptcy is the ultimate financial distress where ownership of the firm's assets is legally...

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Q1. Bankruptcy is the ultimate financial distress where ownership of the firm's assets is legally transferred from the stockholders to the bondholders. Is the above statement true of false? A. True B.'False Q2. According to Example 17.1, in recession, both Knight Corp.'s bondholders and Day Corp.'s bondholder are paid in full because it is company obligation to pay debtholders. Is the above statement true of false? A. True B. False Q3. Which of the following statement is NOT correct? A. Lawyer fees are example of direct costs of financial distress B. Studies have shown that although large in absolute amount, these costs are actually small as a percentage of firm value. C. Impaired ability to conduct business is an example of direct cost of financial distress D. It is quite difficult to measure indirect costs of fincnail distress

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