The debt/equity ratio is computed by dividing total debt by total assets. It is used to measure
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The debt/equity ratio is computed by dividing total debt by total assets. It is used to measure how much leverage a firm uses. A financial analyst feels that the debt/equity ratio in industry A is higher than that in industry B. He randomly selected 20 firms from industries A and B, obtaining the following numbers.
Do a 5 percent test to decide whether industry A’s debt/equity ratio is higher.
Assume the data do not follow a normal distribution.
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Related Book For
Statistics For Business And Financial Economics
ISBN: 9781461458975
3rd Edition
Authors: Cheng Few Lee , John C Lee , Alice C Lee
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