The pecking order hypothesis states that firms make their capital structure decisions by following a pecking order based on transaction costs:

Group of answer choices

1) Internal financing through net income and cash & marketable securities; 2) Changes in trade credit; 3) New equity; 4) New debt

1) Internal financing through net income and cash & marketable securities; 2) Changes in trade credit; 3) New debt; 4) New equity

1) Changes in trade credit; 2) New debt; 3) Internal financing through net income and cash & marketable securities; 4) New equity

1) Changes in trade credit; 2) Internal financing through net income and cash & marketable securities; 3) New debt; 4) New equity