The Pecking Order Explanation of Capital Structure States That a Hierarchy

question 192

True/False

The pecking order explanation of capital structure states that a hierarchy of financing exists for firms, in which retained earnings are employed first, followed by debt financing and finally by external equity financing.

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Definitions:

Black Lung Disease

A lung disease caused by inhaling coal dust over a long period, leading to lung damage and breathing difficulties.

Coal Mine

An excavation in the Earth for extracting coal, a fossil fuel used primarily for generating electricity and heating.

Pneumonia

An infection that inflames the air sacs in one or both lungs, which can fill with fluid or pus, causing coughing, fever, and difficulty breathing.

Novel Influenza A Virus

A new strain of the Influenza A virus that has not previously circulated among humans, posing potential risks of a pandemic.