The Pecking Order Hypothesis suggests that less profitable companies will need more external funding and will first seek debt financing in an asymmetric world,avoiding the equity market.

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The Pecking Order Hypothesis suggests that less profitable companies will first seek debt financing and avoid the equity market in an asymmetric world. This is because they are perceived as riskier and have limited access to external funding, making it more expensive for them to issue equity.

The Pecking Order Hypothesis Suggests That Less Profitable Companies Will