Which Three of the Following Are Motives Explaining the Manifestation

question 21

Multiple Choice

Which three of the following are motives explaining the manifestation of a pecking order in financing decisions?

• A) Ordinary shares are more expensive to issue than issuing debt capital and using retained earnings.
• B) The issue of equity is perceived as an act of desperation.
• C) The firm does not have any more assets unpledged to use as collateral for loans.
• D) Managers follow the line of least resistance with respect to communications and approval of finance promoters.

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Definitions:

Spinal Cord

The main pathway for the transmission of information between the brain and the rest of the body, enclosed within the vertebral column.

Long-lasting Effect

A durable impact or outcome that remains over a long period of time, often beyond the expected or typical duration.

Pituitary Gland

An endocrine gland located below the hypothalamus; secretes several hormones that influence a wide range of physiological processes.

Hypothalamus

A region of the brain responsible for producing hormones that regulate bodily functions such as temperature, hunger, and emotional responses.