Question

Please discuss on the aspects of the bankruptcy process. Also, discuss capital structure and how can a company's structure impact its progress through the bankruptcy process

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Answer 1

Bankruptcy is a state in which the company is not in a position to pay back the debt that it has made, on a legal side the filing of bankruptcy will free it from financial obligation in a significant manner.

there are 3 chapters for the bankruptcyAfter filing the petition the debts are paid of within the asset of the company at a full course and it will be fully undertaken.

The capital structure play a vital role in the company, the arrangement of debt and equity should be minimum cost and maximum profit , if the debt is increased in the company they have to pay more interest and if the equity is increased they have to pay more equity the optimum capital structure should be maintained and if not that will lead to reduction of profit and gradually it will lead to bankruptcy of the company which is come to an end to a company