DQ 1 week 5

"Bankruptcy and Reorganization" Please respond to the following:

• Examine the typical first signs of a firm’s financial distress, and determine what would usually happen to a firm’s cost of capital weighted average cost of capital (WACC) as a result of this distress. Propose two (2) steps that a firm could take in order to decrease the probability of bankruptcy and lower its cost of capital.
• Speculate two (2) reasons as to why many firms like GM reorganize. Support your position with two (2) examples of methods to avoid bankruptcy