According to the pecking order theory,which of the following is the order in which corporations use different financing sources to fund investment projects?
A)retained earnings,equity,debt
B)retained earnings,debt,equity
C)debt,retained earnings,equity
D)equity,retained earnings,debt

Question

Quizplus · Accepted Answer

The pecking order theory suggests that corporations first rely on retained earnings to finance investment projects, then on debt, and finally on equity as a last resort. Therefore, the correct order is retained earnings, debt, and equity, which is represented by option B.

According to the Pecking Order Theory,which of the Following Is