An indirect cost of financial distress

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Reference no: EM131088312

Which of the following is an indirect cost of financial distress?

Firm Y is spending $500,000 on hiring accountants to support their case in the bankruptcy court.

Firm X is unable to pay its debt obligations and therefore it will be spending $2 million dollars on legal expenses.

Firm X believes it will incur a fee of $300,000 to pay for filing and other expenses once it is required to appear in the bankruptcy court.

10 percent of Customers of Firm Y decided to switch to other firm because they are afraid that Firm Y will be heading to bankruptcy.

Reference no: EM131088312

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