MoneyGlossary.com
Home  

Pecking-order view (of capital structure)

Definition: [crh] The argument that external financing transactions costs, especially those associated with the problem of adverse selection, crDefinition: eate a dynamic environment in which firms have a preference, or pecking-order of preferred sources of financing, when all else is equal. Internally generated funds are the moDefinition: st preferred, followed by new debt, and debt-equity hybrids. Finally, new equity is at the least preferred source.

<< Go back