Table 6-13, found on the textbook's Web site, gives data on after-tax corporate profits and net corporate

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Table 6-13, found on the textbook's Web site, gives data on after-tax corporate profits and net corporate dividend payments ($, in billions) for the United States for the quarterly period of 1997:1 to 2008:2.
a. Regress dividend payments (V) on after-tax corporate profits (X) to find out if there is a relationship between the two.
b. To see if the dividend payments exhibit any seasonal pattern, develop a suitable dummy variable regression model and estimate it. In developing the model, how would you take into account that the intercept as well as the slope coefficient may vary from quarter to quarter?
c. When would you regress Y on X, disregarding seasonal variation?
d. Based on your results, what can you say about the seasonal pattern, if any, in the dividend payment policies of U.S. private corporations? Is this what you expected a priori? Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Essentials of Econometrics

ISBN: 978-0073375847

4th edition

Authors: Damodar Gujarati, Dawn Porter

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