If a firm fails to meet its responsibilities to _____, it may be forced into bankruptcy. A. its employees B. the environment C. the government D. its creditors E. its owners

Select all that applyWhat are some ways in which a bankruptcy filing might hinder a firm's normal business operations?Multiple select question.Customers may not buy, fearing future service problems.The government may increase taxes on future sales.Suppliers may not supply inventory, fearing nonpayment.Banks may place restrictions on the firm's financial activities.

2. Which of the following statements is FALSE?Video: 5.F. P54-72 (Capital structure with other market imperfections 1)Group of answer choicesD) Bankruptcy is rarely simple and straightforward—equity holders don’t just "hand the keys" to debt holders the moment the firm defaults on a debt payment.B) With perfect capital markets, the risk of bankruptcy is not a disadvantage of debt—bankruptcy simply shifts the ownership of the firm from equity holders to debt holders without changing the total value available to all investors.A) When a firm fails to make a required payment to debt holders, it is in bankruptcy.C) Bankruptcy can be a long and complicated process that imposes both direct and indirect costs on the firm and its investors that the assumption of perfect capital markets ignores. PreviousNext

A business entity where, in the event of the business being unable to pay its creditors as debts fall due, the owner(s) cannot be forced to sell personal assets or wealth to repay these debts is _____________.

When a company can no longer make payment on its debt, it is ____ 1 in debt restructuring, 2 in  debt default   3 has debt burden,  4 in debt crisis

Which of the following is the most likely consequence of a business that has a large bad debt?YOUR ANSWERYour AnswerThe business will need to take fewer loans.The business must close down.The business may have difficulty paying its own debts on time.The business will be unable to fix or replace equipment.