The Theory That Managers May Prefer Internal Sources of Funds

question 48

Multiple Choice

The theory that managers may prefer internal sources of funds to the lowest cost source of funds is known as

• A)the Modigliani and Miller Proposition.
• B)trade-off theory.
• C)financial stress avoidance theory.
• D)hierarchy of funding.

---

Definitions:

Uniform Resource Locator (URL)

A website’s unique address; an example is microsoft.com.

Consumer To Consumer (C2C)

An online marketplace where consumers can buy and sell goods and services to each other, typically facilitated by a third-party platform.

Business To Consumer (B2C)

The process of selling products or services directly from businesses to the end-users or consumers.

Instant Messenger (IM)

A communication tool that allows real-time text transmission over the internet between two or more people.