According to the Pecking-Order Theory,managers Will Often Choose to Finance

question 75

Multiple Choice

According to the pecking-order theory,managers will often choose to finance with:

• A) new equity rather than debt, due to bankruptcy costs.
• B) debt rather than new equity, to avoid a fall in the share price.
• C) debt rather than retained earnings, to lower the WACC.
• D) new equity rather than debt, to strengthen EPS.

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Definitions:

Leadership Competency Approach

A method in leadership development focusing on identifying and cultivating a set of specific skills, behaviors, and attitudes that contribute to effective leadership.

Senior Executives

Top-level managers or leaders of an organization, responsible for strategic decision-making and overall company direction.

Task-oriented Leadership

A leadership style that focuses primarily on the tasks that need to be performed in order to achieve certain goals or standards.

People-oriented Leadership

A leadership style focused on supporting, motivating, and developing team members, emphasizing interpersonal relationships and employee well-being.