Which of the following statements is correct? 2 pts Ovi new debt and new stock are used to meet new financing needs, et income will decrease from the first pass to the second pass even though taxes decrease. In addition, it didiends are to be paid on new stock this will further decrease the amount of retained earrings watake for francing needs One reason a firm's managers may choose to meet additional funds needed requirements through common stock is that it involves no financing feedback ettects. Since norow debt is used interest expense will be considered fully in the first pass, the income statement will remain unchanged and no second parsis needed Interest expense on additional new debt is the only income statement account affected by financing feedback, and dividends payable to new common stock is the only balance sheet account affected The first pass using the projected balance sheet method determines the handling feedback efects and determines how much in additional tunds are needed. The second pass completes the cycle, identifies the full financing need, and eliminates further feedback effects