Question: Match concepts in group A with examples/definitions in group B [ 1 mark each] Pecking order theory Agency costs Cost of financial distress Trade-off theory
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Match concepts in group A with examples/definitions in group B [ 1 mark each] Pecking order theory Agency costs Cost of financial distress Trade-off theory Fconomic rents [ Choose] Shareholders reject a positive NPV project because they have to fund the project and only receve a proportion of the benelits Profits that more than cover the cost of capital Firms have a target debt ratio that balances the costs of financial distress and the benefts of debt, such as riterect tur shelds Firms prefer to use internal generated cash flow to finance investments. Fees paid to lawyers and accountants in the bankruptcy process
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