The Pecking Order Hypothesis States That Managers Will Have a Preference

question 20

Multiple Choice

The pecking order hypothesis states that managers will have a preference to fund investment by using , followed by , and will issue as a last resort.

• A) debt, retained earnings, equity
• B) retained earnings, equity, debt
• C) retained earnings, debt, equity
• D) debt, equity, retained earnings

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Definitions:

Arousal

A physiological and psychological state of being awake or reactive to stimuli.

Peak Performance

Achieving the highest level of performance in athletic, artistic, or professional endeavours; characterized by high focus and optimal functioning.

Complex Task

An activity or problem that requires a high level of thought, multiple steps, or the integration of various skills and knowledge areas.

Emotional Responses

The physiological, behavioral, and psychological reactions that occur in response to stimuli perceived as emotionally significant.