Which of the following statements accurately describes features of the pecking-order theory of capital structure?

A The theory suggests that firms prefer to use sources of capital with lower issuing costs.

B The theory suggests that firms prefer to issue debt over ordinary shares because the tax shield generated by debt increases the value of the firm.

C More than one of the other statements accurately describes features of the pecking-order theory of capital structure.

D The theory suggests that firms in the same industry will have similar debt to equity ratio.

E None of the other statements accurately describes features of the pecking-order theory of capital structure.