Which of the Following Is True of the Market-Timing Theory

Which of the following is true of the market-timing theory of capital structure?

A) Each firm will have an optimal capital structure,and firms will aim over the long term to converge to that capital structure.
B) Managers take advantage of exiting conditions to derive the maximum value from financing.
C) The dynamic capital structure of firms is determined by a pecking order of financing choices.
D) Firms will tend to have more equity after good performance,and more debt after bad performance.