The financial manager (FM) of Toys Ltd. is faced with a decision regarding its capital structure composition. Currently, the structure consists of R50m in debt and R20m in equity, which is higher than the target D/E ratio. The FM can access either more equity, or more debt, to finance future projects, however, it is expected that the cost of debt will increase if more debt is incurred. Analyst reports indicates that the companys current share price is in line with expectations and that the company has little in the way of retained earnings. The FM chooses to issue equity to fund future projects. Which of the following theories best describes the action taken in the given scenario?

A. Market timing

B. Pecking order

C. M&M

D. Trade-off