According to the pecking order theory of financing

a. Companies would prefer to first use internal funds (i.e. retained earnings) to finance themselves, they would then turn to debt and they would only issue new shares as a last resort

b. The optimal capital structure is determined at that specific financing level where the cost of equity is minimized

c. Companies would prefer to first use external funds (i.e. new debt or new equity) to finance themselves, and they would only use internal funds if they cannot raise external capital

d. The optimal capital structure is determined at that specific financing level where WACC is minimized

e. Companies would prefer to first use internal funds (i.e. retained earnings) to finance themselves, they would then turn to new shares and they would only use new debt as a last resort