Question
Financial distress costs will Blank______ the value of the firm.
Multiple choice question.
reduce
muddy
enhance
increase
Multiple choice question.
reduce
muddy
enhance
increase
Answers
GPT-4o mini
The correct answer is **reduce**.
Financial distress costs typically decrease the value of a firm because they can lead to reduced efficiency, increased costs, and potential bankruptcy or liquidation, all of which negatively affect the firm's overall value.
Financial distress costs typically decrease the value of a firm because they can lead to reduced efficiency, increased costs, and potential bankruptcy or liquidation, all of which negatively affect the firm's overall value.