Question: a. What does the pecking order theory suggest in terms of the firm's financing decision? (3 marks) b. i) What are the two main segments

a. What does the pecking order theory suggest in terms of the firm's financing decision? (3 marks)

b.

i) What are the two main segments of the international bond market? (1 mark)

ii) Which of the two main segments is more subject to local regulation? (1 mark)

iii) Why is it so in question ii)? (1 mark)

c. Please show the answers for A, B, C and D below. (2 marks)

U.K. borrower

Japanese borrower

U.K. Market

Japanese Market

U.K. Market

Japanese Market

GBP

Domestic bond

Eurobond

(C)

Eurobond

YEN

(A)

(B)

(D)

Domestic bond

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