Definition for : Financial distress cost

Financial distress costs are the costs related to Financial distress, and include not only the possibly increased Cost of debt, but also the opportunities of profitable investments foregone due to the inability to raise new funding, Revenues lost due to R&D cuts, etc.

(See Chapters Chapter 34 Debt, equity and options theory and Chapter 35 Working out details: The design of the capital structure of the Vernimmen)

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