1. Below is the list of independent variables in the cross-sectional regression of years 1990-2018: Debt...

  

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1. Below is the list of independent variables in the cross-sectional regression of years 1990-2018: Debt Ratio = a + B'Xit-1 + Et Where Debt Ratio, is a ratio of total debt to total assets. X is a set of independent variables. & is error term. For each variable, please indicate the sign of the coefficient that expected to be found in the regression. In addition, briefly explain why the expected sign is positive or negative. (50%) Independent Variable Property, Plant, and Equipment / Total Assets Total Assets R&D Expenditures/Total Assets Female CEO (=1 if CEO is female, zero otherwise) Financial Crisis Period (=1 if years 2007 and 2008, zero otherwise) Sign of Coefficient (+ or -)? 2. If the debt ratio tends to be fairly stable over time, we can argue that the evidence seems to support the trade-off theory. How might the evidence instead be interpreted as supporting the pecking-order theory? (50%) 1. Below is the list of independent variables in the cross-sectional regression of years 1990-2018: Debt Ratio = a + B'Xit-1 + Et Where Debt Ratio, is a ratio of total debt to total assets. X is a set of independent variables. & is error term. For each variable, please indicate the sign of the coefficient that expected to be found in the regression. In addition, briefly explain why the expected sign is positive or negative. (50%) Independent Variable Property, Plant, and Equipment / Total Assets Total Assets R&D Expenditures/Total Assets Female CEO (=1 if CEO is female, zero otherwise) Financial Crisis Period (=1 if years 2007 and 2008, zero otherwise) Sign of Coefficient (+ or -)? 2. If the debt ratio tends to be fairly stable over time, we can argue that the evidence seems to support the trade-off theory. How might the evidence instead be interpreted as supporting the pecking-order theory? (50%)

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