Question: A linear probability model you have developed finds there are two factors influencing the past bankruptcy behavior of firms: the equity multiplier and the total

A linear probability model you have developed finds there are two factors influencing the past bankruptcy behavior of firms: the equity multiplier and the total ratio. Based on past bankruptcy experience, the linear probability model is estimated as:
PDi = 0.02 (Equity multiplier) – 0.01 (Total

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