Question

A regression analysis was carried out based on 7,016 observations of firms, aimed at assessing the factors that determine the level of a firm's leverage. The independent variables included amount of fixed assets, profitability, firm size, volatility, and abnormal earnings level, as well as a dummy variable that indicated whether the firm was regulated (1) or unregulated (0). The coefficient estimate for this dummy variable was -0.003 and its standard error were -0.29. Does a firm being regulated affect its leverage level? Explain.


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  • CreatedJune 03, 2015
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