According to The Pecking Order Theory (POT), equity funding is the cheapest because of the low information asymmetry

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The Pecking Order Theory suggests that companies prioritize their sources of financing (from internal financing to equity) according to the principle of least effort, or least resistance, preferring to raise equity as a last resort due to high costs of information asymmetry, making it more expensive compared to debt financing.

According to the Pecking Order Theory (POT), Equity Funding Is