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According to pecking order theory, firms will first use internal financing (retained earnings) to finance projects. Why is that the case? Consider four sources of

According to pecking order theory, firms will first use internal financing (retained earnings) to finance projects. Why is that the case? Consider four sources of financing: newly issued debt, newly issued hybrid securities (such as preferred stock or convertible bonds), newly issued common shares, and retained earnings. According to the theory, in what order will the sources of financing be used?

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