[Verse 1] When companies need money, they start inside their vault Retained earnings whisper secrets without any fault No outside eyes can judge what managers truly know Internal cash flows freely where information's kept below [Chorus] First internal, then debt, then equity last Pecking order theory holds the hierarchy fast Information gaps create the ranking clear Cheapest signals first, expensive ones we fear Internal, debt, equity - remember the cascade Less asymmetry means lower price you've paid [Verse 2] Bank loans come second when internal funds run dry Lenders dig for details but some truths still hide nearby Interest rates reflect the risk of what they cannot see But bonds beat issuing stock for maintaining privacy [Chorus] First internal, then debt, then equity last Pecking order theory holds the hierarchy fast Information gaps create the ranking clear Cheapest signals first, expensive ones we fear Internal, debt, equity - remember the cascade Less asymmetry means lower price you've paid [Bridge] Selling shares screams trouble to the marketplace crowd "We're overvalued" echoes far too loud Stock price tumbles when new equity's announced Every dilution leaves shareholders denounced Myers and Majluf discovered this parade Signaling costs make the pecking order trade [Verse 3] Managers guard secrets like treasure in a chest What they know exceeds what markets can assess External financing sends signals to the street Each source reveals more than balance sheets complete [Chorus] First internal, then debt, then equity last Pecking order theory holds the hierarchy fast Information gaps create the ranking clear Cheapest signals first, expensive ones we fear Internal, debt, equity - remember the cascade Less asymmetry means lower price you've paid [Outro] When information's hidden, financing finds its place Cheapest source with lowest signaling disgrace The pecking order governs every corporate choice Let asymmetry determine your financing voice
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