On February 29, 2019, when PDQ Computers announced bankruptcy, its share price fell from $3.00 to $.50

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On February 29, 2019, when PDQ Computers announced bankruptcy, its share price fell from $3.00 to $.50 per share. There were 10 million shares outstanding. Does that imply bankruptcy costs of 10 × (3.00 – .50) = $25 million? Explain.

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Principles of Corporate Finance

ISBN: 978-1260013900

13th edition

Authors: Richard Brealey, Stewart Myers, Franklin Allen

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Question Posted: Feb 06, 2020 05:36 AM

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On February 29, 2019, when PDQ Computers announced bankruptcy, its share price fell from $3.00 to $.50

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Principles of Corporate Finance

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