Which of the Following Is the Correct Order of Financing

question 6

Multiple Choice

Which of the following is the correct order of financing choices according to the pecking-order theory,starting with the most preferred choice?

• A)Internal funds,debt,equity.
• B)Debt,equity,internal funds.
• C)Internal funds,equity,debt.
• D)Equity,internal funds,debt.

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Definitions:

Patent

A legal right granted by the government to an inventor, giving the holder exclusive rights to use, make, or sell the invention for a certain period.

Intangible Assets

Assets lacking physical substance, such as patents, trademarks, and goodwill, that are nevertheless valuable to a company.

Kitchen Gadget

A small tool or device that is used in the kitchen for food preparation and cooking tasks.

Land

An asset category representing the ground a company owns, which is not subject to depreciation unlike buildings and equipment.