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The pecking order theory implies that: a. there is a target debt/equity ratio. b. firms value is maximized at some point where the additional gain

The pecking order theory implies that:

a. there is a target debt/equity ratio.

b. firms value is maximized at some point where the additional gain from interest tax shield equal the added costs of financial distress.

c. firms will use internal financing first, then debt financing, lastly equity financing.

d. firms value will increase with the use of debt financing.

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