Based on historical experience, which of the following best describes the "pecking order" of long-term financing strategy in the U.S.?
A)Long-term debt first, new common equity, internal financing last.
B)Long-term debt first, internal financing, new common equity last.
C)Internal financing first, new common equity, long-term borrowing last.
D)Internal financing first, long-term borrowing, new common equity last.
E)None of the above.

Question

Quizplus · Accepted Answer

The pecking order theory suggests that companies prefer to finance themselves first with internal funds, then with debt, and finally with new equity as a last resort.

Based on Historical Experience, Which of the Following Best Describes