1. Frank and Goyal (2003) assert that (i) the pecking order theory of Myers and Majluf (1984) is founded on asymmetric information and (ii) the asymmetry of information between insiders and outsiders is greater for small firms. They document that the pecking order theory, in fact, fits the actual financing behaviour of large firms better than the financing behaviour of smaller firms. They argue, based on (i) and (ii), that this better fit for large firms is evidence against pecking order theory. What do you think about this argument? Are there any properties of the pecking order theory that might lead one to believe that the pecking order theory fits large firms better than small firms?