Question: What does pecking order hypothesis say? A) When firms make investment decisions, they should follow the order of project NPVs. B) When firms choose to

  1. What does pecking order hypothesis say?

A) When firms make investment decisions, they should follow the order of project NPVs.

B) When firms choose to finance for investment, they should prefer internal cash holdings to issuing debt to issuing equity.

C) When firms design a compensation package for managers, stock options come before dollar wage.

D) It is a hypothesis for how to rank the impact of different agency issues.

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