The Pecking Order Theory States That When External Funds Are

question 16

Multiple Choice

The pecking order theory states that when external funds are required,a firm should

• A)refund all monies pulled from internal sources with external funds.
• B)only issue equity securities after the firm's debt capacity is reached.
• C)never issue any convertible securities.
• D)issue convertible bonds prior to straight bonds.
• E)limit its debt-equity ratio to no more than 0.5.

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Definitions:

Unwelcome Advances

Behavior or actions, often in a workplace or professional setting, that are not desired or welcomed by the recipient, typically of a sexual nature.

Hostile Work Environment

A workplace characterized by severe or pervasive harassment, intimidation, or discrimination that alters working conditions and creates a toxic atmosphere.

Natural Resources

Resources that exist without the actions of humankind, originating from the Earth and its environment, such as water, air, soil, minerals, and forests.

Capital

Production inputs consisting of technology, tools, information, and physical facilities.