The Pecking Order Hypothesis Predicts That the ________ a Corporation

question 40

Multiple Choice

The pecking order hypothesis predicts that the ________ a corporation is,the more likely it will be to ________.

• A) smaller and less well known; issue securities
• B) larger and more well known; borrow from financial intermediaries
• C) larger and more well known; issue securities
• D) smaller and less well known; need external financing

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Definitions:

Government Regulation

The imposition of laws and rules by a government to control or manage certain activities or industries for public welfare.

Gratuitous Bailment

Gratuitous bailment occurs when personal property is voluntarily transferred to another's custody without expectation of payment or benefit, purely for the benefit of one party.

Written Agreement

A contract or document outlining the terms and conditions agreed upon by parties, set down in writing to serve as evidence of the agreement.

Standard Of Care

The degree of caution and concern an ordinary, prudent person should take in specific circumstances, often used as a benchmark in legal and medical fields to assess performance or negligence.