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