Which One of the Following Is Correct According to Pecking-Order

Multiple Choice

Which one of the following is correct according to pecking-order theory?

A) There is a direct relationship between a company's profits and its debt levels.
B) Companies avoid external debt except as a last resort.
C) A company's capital structure is independent of its need for external funding.
D) Companies stockpile internally generated cash.
E) Every company has an optimal capital structure.