Read the following statements comments whether the statement is true or not. If statement is not true than write the correct statement.

According to one of the financial theories of capital structure, firms first use debt for their capital, then use common equity if and only if they can raise no more equity on "reasonable" terms. This occurs because the use of debt financing gives tax benefits to firm and the firm's managers think that this strategy makes the future of the firm good.

First write True or Falsee - then report your answer in the next line.