Question: 7.7 For this question use data set EQUITY.XLS containing the SEO dummy DEBT, SALES, INCOME and ASSETS (see the example at the beginning of this

7.7 For this question use data set EQUITY.XLS containing the SEO dummy DEBT, SALES, INCOME and ASSETS (see the example at the beginning of this chapter for precise definitions of variables). Construct four new explanatory variables which interact the SEO dummy with each of the four other explanatory variables. Using these nine explanatory variables (i.e. the original five explanatory variables and four interactions), construct and justify a regression model. Begin by running a regression with all explanatory variables, then experiment with dropping out insignificant variables until you find a specification where all explanatory variables are significant (and you are not omitting any significant variables). Write a short report interpreting the results from the regression model you end up with.

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