Which One of the Following Is Correct According to Pecking-Order

question 80

Multiple Choice

Which one of the following is correct according to pecking-order theory?

• A) There is a direct relationship between a company's profits and its debt levels.
• B) Companies avoid external debt except as a last resort.
• C) A company's capital structure is independent of its need for external funding.
• D) Companies stockpile internally generated cash.
• E) Every company has an optimal capital structure.

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Definitions:

Footdrop

A condition characterized by difficulty in lifting the front part of the foot, which can cause the foot to drag while walking, often resulting from nerve damage or muscle disorders.

High-Top Tennis Shoes

Athletic shoes that extend significantly above the ankle, often providing extra support and stability.

Sequential Compression Devices

Devices used to apply pressure to the limbs to prevent blood clots by improving venous return.

Ambulate

The act or ability to walk from place to place independently with or without assistance.