Financial theory suggests and empirical evidence supports the idea that firms have a"pecking order" by which they choose to raise funds to finance assets.From the first source of financing to the last this pecking order is:

Question

Quizplus · Accepted Answer

Financial theory and empirical evidence suggest that firms prefer financing assets with internally generated funds first, then with debt, and finally with new equity. This is because issuing new equity is often seen as a signal of financial distress or lack of profitability, thus firms try to avoid it unless necessary. Therefore, option A is the correct pecking order.

Financial Theory Suggests and Empirical Evidence Supports the Idea That