Bankruptcy Risk
The risk that a company will be unable to meet its debt obligations. Often referred to as "default" or "insolvency risk". Investopedia Says:
This is a risk that both equity- and bondholders take when deciding to invest in a company. Aside from looking at overall profitability, analyzing a company's debt obligations and ability to repay, agencies like Moody's and Standard & Poor's attempt to determine this risk by giving bond ratings. Related Terms:
Absolute Priority
Accounting Insolvency
Asset Quality Rating
Bankruptcy
Chapter 11
Chapter 7
Debt Overhang
Default
Prepackaged Bankruptcy
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