Which of the Following Are Correct According to Pecking-Order Theory

Multiple Choice

Which of the following are correct according to pecking-order theory?
I.Firms stockpile internally-generated cash.
II.There is an inverse relationship between a firm's profit level and its debt level.
III.Firms avoid external debt at all costs.
IV.A firm's capital structure is dictated by its need for external financing.

A) I and III only
B) II and IV only
C) I, III, and IV only
D) I, II, and IV only
E) I, II, III, and IV