Develop a regression model to predict price-to-book-value ratio based on return on equity.

ModifyingAbove Upper Y with caret Subscript iYiequals=2.33132.3313plus+0.07040.0704Upper X Subscript 1 iX1i

(Round to four decimal places as needed.)

Part 2

b. Develop a regression model to predict price-to-book-value ratio based on growth.

ModifyingAbove Upper Y with caret Subscript iYiequals=3.13993.1399plus+0.03080.0308Upper X Subscript 2 iX2i

(Round to four decimal places as needed.)

Part 3

c. Develop a regression model to predict price-to-book-value ratio based on return on equity and growth.

ModifyingAbove Upper Y with caret Subscript iYiequals=1.94381.9438plus+0.06040.0604Upper X Subscript 1 iX1iplus+0.02170.0217Upper X Subscript 2 iX2i

(Round to four decimal places as needed.)

Part 4

d. Compute and interpret the adjusted

r squaredr2

for each of the three models.

Start with the part (a) model.

The adjusted

r squaredr2

shows that

?%

of the variation in

?

is explained by

?

before

correcting for the number of independent variables in the model.

(Round to one decimal place as needed.)

Return on Equity

Adjusted R Square

0.332617572

Growth% X2i

Adjusted R Square

0.188666567

Return on Equity X1i

Growth% X2i

Adjusted R Square

0.418204582