Which one of the following theories about capital structure is based on agency cost?
A)M&M proposition I
B)Homemade leverage
C)Pecking order
D)Static trade-off

Question

Quizplus · Accepted Answer

The Pecking Order Theory is based on agency costs, suggesting that companies prioritize their sources of financing (from internal financing to equity) according to the principle of least effort, or least resistance, to minimize the costs and risks associated with financing.

Which One of the Following Theories About Capital Structure Is