Multiple Choice
The pecking order theory states that when external funds are required,a firm should
A) refund all monies pulled from internal sources with external funds.
B) only issue equity securities after the firm's debt capacity is reached.
C) never issue any convertible securities.
D) issue convertible bonds prior to straight bonds.
E) limit its debt-equity ratio to no more than 0.5.
Correct Answer:
Verified
Correct Answer:
Verified
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