Appendix 8A Vocabulary

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Across
  1. 1. The costs of ensuring that managers act in the interests of other stakeholders
  2. 3. Type of costs that occur before bankruptcy; E.g. Lost credibility in the marketplace
  3. 4. Increases the value of debt by reducing the variability of operating cash flows
  4. 7. Type of costs such as legal fees that occur during bankruptcy
Down
  1. 2. Option to buy an asset at a predetermined exercise price and on a predetermined expiration date
  2. 5. Has an incentive to take large risks during times of financial distress
  3. 6. Must be paid before equity owners in a bankruptcy situation