Financial manager determine optimal capital structure

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Have a couple of questions. Each question needs it's own answer and one reference for each question.

Q1: How would a financial manager determine optimal capital structure? How this would fit in with the company's capital expenditures, growth plans and operating results?

Q2: In a "perfect world" capital market, how important is a firm's decision to pay dividends versus repurchase shares? Under what conditions would you have a tax preference for share repurchase rather than dividends? Would managers acting in the interests of long-term shareholders be more likely to repurchase shares if they believed the stock to be either undervalued or overvalued?

Reference no: EM131429274

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