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1) What are the direct and indirect costs of bankruptcy? Briefly explain each

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1) What are the direct and indirect costs of bankruptcy? Briefly explain each. Additionally, some firms have filed for bankruptcy because of actual or likely litigation-related losses. Is this proper use of the bankruptcy process?

2. Explain the use of dividends versus repurchases? Specifically, when might a company use a dividend and when they might use a stock repurchase? Consider recent examples in the financial news.