Bankruptcy
State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from the stockholders to the bondholders. |
Similar financial terms
Prepackaged bankruptcyA bankruptcy in which a debtor and its creditors pre-negotiate a plan or reorganization and then file it along with the bankruptcy petition.
Legal bankruptcy
A legal proceeding for liquidating or reorganizing a business.
Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other benefits from leverage so that the optimal amount of leverage is less than 100% debt finaning.
Bankruptcy risk
The risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk.
Bankruptcy view
The argument that expected bankruptcy costs preclude firms from being financed entirely with debt.
