What does pecking order hypothesis say? A) When firms make investment decisions, they should follow the...
- What does pecking order hypothesis say?
A) When firms make investment decisions, they should follow the order of project NPVs.
B) When firms choose to finance for investment, they should prefer internal cash holdings to issuing debt to issuing equity.
C) When firms design a compensation package for managers, stock options come before dollar wage.
D) It is a hypothesis for how to rank the impact of different agency issues.
Homework Answers
The pecking orfer hypotheses states that there is an order with which a firm prefers to finance it's operations.
Initially it prefers raising cash through it's internal cash holdings, then to issue debt and in the last through equity. As equity is the most expensive option to raise the required cash.
So, the correct option is option B.
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What does pecking order hypothesis say?
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thoroughness of coverage of...
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1. What is the link between internal marketing and service
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2. What internal marketing programmes could British Airways
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3. What challenges may BA face in implementing an internal
marketing programme to deliver value to its customers?
(1981)ǐn the context ofbank marketing ths theme has bon pururd by other, nashri oriented towards the identification of...
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