Which of the following are correct according to the pecking$-$order theory of capital structure?

I. Firms have the incentive to stockpile internally$-$generated cash.

II$.$ There is an inverse relationship between a firm$$s profit level and its debt level.

III. Firms avoid external debt at all costs.

IV$.$ A firm$$s capital structure is dictated by its need for external financing.

V$.$ A firm$$s optimal capital structure depends on the benefits of debt in mitigating managerial entrenchment and the agency costs arising from conflicts of interests between debtholders and shareholders

Answer Choices:

I and III only

II and IV only

I, II$,$ and IV only

I, II$,$ and V only