Click here for the Excel Data File a-1. Estimate: Return Bo B1P/E B2 P/S E. (Neg

Question

Click here for the Excel Data File a-1. Estimate: Return Bo B1P/E B2 P/S E. (Negative values should be indicated by a minus sign. Round your answers to 4 decimal places.) Return P/E P/S a-2. Are the signs on the coefficients as expected? O Yes O No b. Interpret the slope coefficient of the P/S ratio. O As the PIS ratio increases by 1 unit, the predicted return of the firm decreases by 4.39%, holding P/E constant. O As the PIS ratio increases by 1 unit, the predicted return of the firm increases by 3.37%, holding P/E constant O As the PIS ratio increases by 1 unit, the predicted return of the firm decreases by 3.37%, holding P/E constant. As the P/S ratio decreases by 1 unit, the predicted return of the firm decreases by 5.37%, holding P/E constant. c. What is the predicted return for a firm with a P/E ratio of 10 and a P/S ratio of 2? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places Return d. What is the standard error of the estimate? (Round your answer to 2 decimal places.) e. Interpret R2 O 40.28% of the sample variation in y is explained by the sample regression equation. O 40.28% of the sample variation in x is explained by the sample regression equation. O 63.46% of the sample variation in x is explained by the sample regression equation O 35.85% of the sample variation in y is explained by the sample regression equation.

Explanation / Answer

a-1)

Return=-33.40+3.967*P/E-3.368*P/S

a-2)

Yes

b)

As the P/S ratio increases by 1 unit, the predicted return decreases by 3.37%, holding P/E constant.

c)

Return=-33.40+3.967*10-3.368*2=-0.459

d)

13.637

e)

40.28% of the sample variation in y is explained by sample regression equation

SUMMARY OUTPUT Regression Statistics Multiple R 0.634635787 R Square 0.402762582 Adjusted R Square 0.358522773 Standard Error 13.63767353 Observations 30 ANOVA df SS MS F Significance F Regression 2 3386.463904 1693.231952 9.104076024 0.000950571 Residual 27 5021.625763 185.9861394 Total 29 8408.089667 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept -33.39664316 12.77975967 -2.613245007 0.014481495 -59.61854405 -7.174742266 P/E ratio 3.967376943 0.958744664 4.138095463 0.000306843 2.000195385 5.934558501 P/S ratio -3.3680906 2.629434539 -1.280918216 0.21111606 -8.76324463 2.027063429

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.