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The current academic consensus regarding the relevance of bankruptcy costs on capital structure decisions is...

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Finance

The current academic consensus regarding the relevance of bankruptcy costs on capital structure decisions is that

only the direct costs associated with bankruptcy need be considered since the indirect costs are minor by comparison and are difficult to quantify

none of the above is true

expected bankruptcy costs for large, healthy firms are small and probably can be ignored when determining these firms capital structures

the relevance of bankruptcy costs to a firms capital structure decision is directly proportional to the number of times the firm has filed for bankruptcy in the past

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