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O ? https://dassesalaskaedu/webapps/assessmm ? | ?? ¥ Question Completion Status: QUESTION 5 10 points Save Answer Explain why the capital structure of a firm is irrelevant to equity investors. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). 2 Path. P Words 0 QUESTION 10 points Saved Flemington Farms is evaluating an extra dividend versus a share repurchase. In either case, $15,000 would be spent. Current earmings are S2.80 per share, and the stock currently sells for $75 per share. There are 2,800 shares outstanding. Ignore Ctick Save and Submit to save and submit. Click Save All Anwers to satve all an suers. Save All Answers Save and Submit O Type here to search

Explanation / Answer

In a perfect capital market the value of the firm and investor cash flow are not dependent on each other. When capital structure is changed then it results in either increase or decrease in expected return which is off set by beta and required return therefore this will have no impact on the value for the investor. It can be said that capital structure desicion are irrevant to equity investor.

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