Which of the following is an indirect cost of financial distress?
Firm Y is spending $500,000 on hiring accountants to support their case in the bankruptcy court.
Firm X is unable to pay its debt obligations and therefore it will be spending $2 million dollars on legal expenses.
Firm X believes it will incur a fee of $300,000 to pay for filing and other expenses once it is required to appear in the bankruptcy court.
10 percent of Customers of Firm Y decided to switch to other firm because they are afraid that Firm Y will be heading to bankruptcy.