EGMT 535 (EGMT 535)

1. A central question that must be addressed in bankruptcy proceedings is whether the firm’s inability to meet scheduled interest payments results from a temporary cash flow problem or from a potentially permanent problem caused by falling asset values. True 2. In the event of bankruptcy under the federal bankruptcy laws, debtholders have a prior claim to a firm’s income and assets before both common and preferred stockholders. Moreover, in a bankruptcy all debtholders are treated eq...