bankruptcy cost view

Definition

The argument stating that the expected direct and indirect costs of bankruptcy will offset any of the other benefits that are received from leverage so that the optimal amount of leverage is less than 100 percent of debt financing. This theory states that the costs of bankruptcy will offset or even exceed the benefits that the company receives from a great deal of leverage.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 bankruptcy court