I need help understanding this questions, it has a basic answer, but I need to understand the concepts of the answer and build on it ( I have limited Finance knowledge.

The question is "Why is the informational efficiency of the capital market important in determining a firms optimal financing policy? Explain carefully. Does it make a difference whether the capital market is strong form or semi-strong form efficient? Explain."

Answer

"Explain in the following dimensions pertaining to market efficiency Define three forms of market efficiency How they impact valuation of investments, risks How they affect timing and issuance of stock and/or debt Pecking order vs. trade-off?"

Could you explain those concepts in relation to the questions.