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According to the pecking order theory of capital structure, firms with a lot of free cash flows should: Have low debt ratios because internal fund

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According to the pecking order theory of capital structure, firms with a lot of free cash flows should: Have low debt ratios because internal fund is enough for investment. Have high debt ratios to save agency costs of equity. Have high debt ratios because bankruptcy is not possible. Have low debt ratios to save agency costs of debt

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