The Pecking Order Theory of Capital Structure Predicts That

question 70

Multiple Choice

The pecking order theory of capital structure predicts that:

• A) If two firms are equally profitable, the more rapidly growing firm will borrow more, other things equal
• B) Firms prefer equity to debt financing
• C) Risky firms will end up borrowing less
• D) Risky firms will end up borrowing more

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Definitions:

HBr

Hydrobromic acid, a diatomic molecule consisting of hydrogen and bromine, used commonly in organic synthesis and as a reagent.

Control

In the context of experiments, a standard condition or treatment that does not change, used as a benchmark to measure the effects of the experimental variable.

Activation Energies

The minimum amount of energy required to initiate a chemical reaction.

Antibonding π Molecular Orbital

A molecular orbital formed when lobes of p orbitals on two atoms combine in a phase mismatch, weakening the bond between the atoms.