Which One of These Statements Is a Correct Implication of the Pecking

question 18

Multiple Choice

Which one of these statements is a correct implication of the pecking order theory?

• A)External financing should be limited to debt issues.
• B)The target debt level occurs when the marginal benefit of debt equals the marginal cost of debt.
• C)Companies like financial slack so they can reduce their external capital needs.
• D)Internally funded projects lower the market value of equity.
• E)Profitable firms use more debt.

---

Definitions:

Tang Dynasty

An imperial dynasty of China (618-907 AD) renowned for its artistic, cultural, and intellectual advancements, and considered a high point in Chinese civilization.

Bodhisattva

In Buddhist thought, a potential Buddha who chooses not to achieve enlightenment in order to help save humanity.

Buddhism Introduction

The spread of Buddhism into various regions around the globe, beginning in the 6th century BCE, which introduced the teachings of Siddhartha Gautama, emphasizing enlightenment and the middle path.

Korea

A country in East Asia, known for its rich history, culture, and divide into two distinct nations: North Korea and South Korea, following the Korean War.