A multiple regression model was developed for predicting firms' governance level, measured on a scale, based on firm size, firm profitability, fixed-asset ratio, growth opportunities, and non-debt tax shield size. For firm size, the coefficient estimate was 0.06 and the standard error was 0.005. For firm profitability, the estimate was -0.166 and the standard error was 0.03. For fixed-asset ratio the estimate was -0.004 and standard error 0.05. For growth opportunities the estimate was – 0.018 and standard error 0.025. And for non-debt tax shield the estimate was 0.649 and standard error 0.151. The F statistic was 44.11 and the adjusted R2 was 16.5%. Explain these results completely and offer a next step in this analysis. Assume a very large sample size.
Answer to relevant QuestionsIn terms of model assumptions, what is the difference between a multiple regression model with k independent variables and a correlation analysis involving these variables? After the model of problem 11-35, the next model was run: The regression equation is Analysis of Variance a. What happened when Price was dropped from the regression equation? Why? b. Compare this model with all previous ...Using the information in Table, what is the standard error of Y-hat? What is the standard error of E(Y-hat)? For a multiple regression model with two independent variables, results of the analysis include ∑y = 852, ∑x1 = 155, ∑x2 = 88, ∑x1y = 11,423, ∑x2y = 8,320, ∑x1x2 = 1,055, ∑x21 = 2,125, and ∑x22 = 768, n = ...The table that follows presents financial data of some companies drawn from four different industry sectors. The data include return on capital, sales, operating margin, and debt-to-capital ratio all pertaining to the same ...
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