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:

Connective Tissue

A type of tissue in the body that supports, connects, or separates different types of tissues and organs.

Parathyroid Gland

One of four glandular masses embedded in the posterior surface of the thyroid gland; secretes parathyroid hormone.

Mineralocorticoids

A class of corticosteroids that are essential for regulating the balance of minerals and water in the body.

PTH

Parathyroid hormone, a regulator of calcium and phosphate metabolism in the body.