Question: 16. Select the incorrect statement below regarding bankruptcy costs. A) The costs of uncertainty associated with corporate default are flotation costs. B) The explicit costs

16. Select the incorrect statement below regarding bankruptcy costs.

A) The costs of uncertainty associated with corporate default are flotation costs.

B) The explicit costs associated with corporate default, such as legal expenses,

are the direct bankruptcy costs.

C) The implicit costs associated with corporate default, such as lost sales, are the

indirect bankruptcy costs.

D) The explicit and implicit costs associated with corporate default are also called the financial distress costs.

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