The Pecking-Order Model of Capital Structure Suggests the Order in Which

question 68

Multiple Choice

The pecking-order model of capital structure suggests the order in which firms prefer to raise capital is:

• A)debt,then retained earnings,then external equity.
• B)retained earnings,then debt,then external equity.
• C)preferred stock,then debt,then external equity.
• D)debt,then external equity,then retained earnings.

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Definitions:

Social Role

The part individuals play in their communities or societies as dictated by norms, relationships, and expectations.

Shared Meaning

A common understanding or significance attributed to a word, concept, or symbol among a group of people.

Puritans

A group of English Protestants in the 16th and 17th centuries who sought to purify the Church of England of its Catholic practices.

Centralist Theory

A political ideology or approach suggesting that political power or decision-making should be concentrated in a central authority or government.