A firm wishes to undertake a project that costs $150 million. It currently has $10 million in cash on hand and believes that it can raise $75 million in debt and $100 million in equity if needed. According to the pecking order theory of the capital structure, what percent of the project will be financed by debt?
A) 0%
B) 26.67%
C) 50%
D) None of the above

Question

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The Answer of A firm wishes to undertake a project that costs $150 million. It currently has $10 million in cash on hand and believes that it can raise $75 million in debt and $100 million in equity if needed. According to the pecking order theory of the capital structure, what percent of the project will be financed by debt?
A) 0%
B) 26.67%
C) 50%
D) None of the above

A Firm Wishes to Undertake a Project That Costs $150