The payment to lawyers becomes relevant in the context of capital structure decisions in the event of financial distress.
Financial distress is a term commonly used in business finance to describe a situation in which the financial condition of an individual or business makes it difficult to pay bills, especially loans to creditors. Severe and prolonged financial difficulties can eventually lead to bankruptcy.
In the event of an economic emergency, immediate action should be taken to prevent the situation from becoming worse. Financial problems often lead to other financial problems if they cannot be resolved quickly.
For example, the creditworthiness of individuals or businesses in financial difficulty may be compromised. This forces lenders to charge higher interest rates and makes it harder for them to borrow additional money to cope with periods of reduced income or sales.
learn more about capital structure here: https://brainly.com/question/15724071
#SPJ4
