One of the indirect costs of bankruptcy is the effect that a potential bankruptcy has on the firm's decisions. the general result is that:______.

Bankruptcy is a legal process that allows people or other entities who are unable to repay their creditors to seek relief from some or all of their debts.
The impact of potential bankruptcy on the firm's decisions is one of the indirect costs of bankruptcy.
As a result, stockholders steal value from bondholders by investing in high-risk projects.
In most jurisdictions, bankruptcy is imposed through a court order, which is frequently initiated by the debtor.
When your case is resolved, we will be relieved of the majority of your debts.
Creditors are also prohibited by law from attempting to collect any outstanding debts from us.

Therefore, the general result is that (B) stockholders expropriate value from bondholders by selecting high-risk projects.

Know more about bankruptcy here:

https://brainly.com/question/26392690

#SPJ4

The complete question is given below:

One of the indirect costs of bankruptcy is the effect that a potential bankruptcy has on the firm's decisions. The general result is that:

A. the firm will select only all-equity financed projects.

B. stockholders expropriate value from bondholders by selecting high-risk projects.

C. the firm will always select the lowest-risk project available.

D. bondholders expropriate value from stockholders by selecting high-risk projects.

E. the firm will rank all projects and select the project which results in the highest expected firm value.