Which of the Following Is the Best Definition of Financial

Multiple Choice

Which of the following is the best definition of financial distress costs?

A) A legal proceeding for liquidating or reorganizing a business. Also, the transfer of some or all of a firm's assets to its creditors.
B) The direct and indirect costs associated with going bankrupt or experiencing financial distress.
C) The equity risk that comes from the financial policy (i.e., capital structure) of the firm.
D) The use of personal borrowing to change the overall amount of financial leverage to which the individual is exposed.
E) The difficulties of running a business that is experiencing financial distress.