Firms Follow the "Pecking Order" in Their Long-Term Financing Because

question 18

Multiple Choice

Firms follow the "pecking order" in their long-term financing because:

• A) internally generated funds are the cheapest source of financing.
• B) outsiders will know less about the company and reduce the threat of any takeover.
• C) other financial strategies create more agency problems.
• D) firms prefer to issue safe securities with less valuation risk first.