Which collection of the following statements is most accurate according to Pecking Order Theory of capital structure? (1) Young firms should be fully equity-funded (2) More profitable firms should use higher debt than less profitable firms (3) Firms maintain more internal funds when they face higher information asymmetry in the capital market (4) A firm should first consider raising debt instead of equity when it faces insufficient internal funds (5) With asymmetric information, firms stock price will drop upon the announcement of new equity issuance (6) Firms should issue equity when it is overvalued, and issue debt when its equity is under-valued.

(2), (3), and (6)

Only (3), (4), and (6)

None of the above

Only (3), (4), and (5)

(1), (4), (5), (6)