According to the pecking order theory of capital structure,when external funding is needed,common stock will be used to raise the funds.

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According to the pecking order theory, companies will first use retained earnings, then debt, and then finally equity as a last resort to fund their operations or investments. Therefore, when external funding is needed, common stock would be the last option to raise funds, not the first.

According to the Pecking Order Theory of Capital Structure,when External