Which of the Following Are Correct According to Pecking-Order Theory

question 86

Multiple Choice

Which of the following are correct according to pecking-order theory?
I.Firms stockpile internally-generated cash.
II.There is an inverse relationship between a firm's profit level and its debt level.
III.Firms avoid external debt at all costs.
IV.A firm's capital structure is dictated by its need for external financing.

• A)I and III only
• B)II and IV only
• C)I, III, and IV only
• D)I, II, and IV only
• E)I, II, III, and IV

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Definitions:

Conversation

The informal exchange of ideas, information, and feelings between two or more people through spoken words or written text.

Conflict Theory

focuses on the social and material inequalities of different groups in a society, suggesting that these conflicting interests are the engine of social change.

Actualize Will

The process of making one's desires, intentions, or ambitions a reality through action and determination.

Monopolize Conversation

Dominating a discussion to the extent that others have little to no opportunity to contribute.