The Pecking Order Theory States That When External Funds Are

question 51

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:

Nausea

A sensation of unease and discomfort in the stomach, often preceding vomiting.

Vomiting

The forceful expulsion of the contents of one's stomach through the mouth.

Onset

The moment or starting point of a particular event or phenomenon.

Prenatal Care

Medical and health care provided to a pregnant woman to ensure the well-being of both her and her unborn child.