The following statements are all possible reasons that shareholders of a firm do not want to issue equity to fund a positive NPV project EXCEPT: The stock of the firm is currently undervalued. There is existing debt outstanding that might default in some bad states. The cost of financial distress is high. The firm has enough internal cash to fund the project. Question 4 Which of the following statements on the pecking-order theory is NOT true? Firms prefer internal to external financing. Firms prefer long-term debt financing to short-term financing. Firms prefer debt financing to equity financing. Firms like to accumulate cash generated internally to fund future projects