1. The consultant for the case on the capital structure for Trans Quebec Maritime Pipeline estimated an empirical equation, see the table below, relating utilities' equity ratios to a set of firm/ industry-specific and market related variables. He argued these results provided evidence in support of the established capital structure theories. Please discuss the reasoning underlying his assertions. (10 marks) Variables Constant BetaNT BetawT ROA DP DGE 0.3454 0.3722 EQRATIO (6.607) (2.932) R = 87.39% 0.3452 EQRATIO R = 86.13% (6.07) 0.7272 -0.1189 -0.0219 (2.422) (-4.847) (-0.934) 0.2940 0.7635 -0.1268 -0.0325 (2.577) (2.435) (-4.971) (-0.957)