Southwest Airlines has substantial cash reserves and an investment-grade bond rating. How would the trade-off theory predict

Question:

Southwest Airlines has substantial cash reserves and an investment-grade bond rating. How would the trade-off theory predict that managers of Southwest would raise capital and choose the company's if they were planning an expansion into Mexico? What would the pecking order theory suggest?
Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a...