Financial Distress Article Index for
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Financial distress cost are divided into: direct costs
: indirect costs

Direct Costs
-changes the payout to debtholders if bankruptcy occurs. these include the direct expenses that a company inccurs; auditors' fees, legal fees, management fees and other payments.

Indirect Costs
-changes the distrubition of firm value prior to bankruptcy. these include loss goodwill. which will result in less sales, hence revenue