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Which of the following statements is correct? 1) The tradeoff theory suggests that firms with large profits are more likely to use debt 2) Pecking

Which of the following statements is correct?

1) The tradeoff theory suggests that firms with large profits are more likely to use debt

2) Pecking order theory suggests that firms with large profits are more likely to use internal financing

3) Both are TRUE

4) Both are FALSE

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