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.(13 pts) Using the logit model estimates below, Logit model: predicting corporate bankruptcy Explanatory Variable Coefficient Constant -4.71 Debt/Total Assets 0.018 int pmt/profits 0.013 a)
.(13 pts) Using the logit model estimates below, Logit model: predicting corporate bankruptcy Explanatory Variable Coefficient Constant -4.71 Debt/Total Assets 0.018 int pmt/profits 0.013 a) what is the estimated probability of bankruptcy for a company that has Debt to Total Assets of 75 and a ratio of interest payments to profits of 40 (both values in percent, the units used in estimation)? b) Describe the steps that would be required to test the hypothesis that the coefficient on Debt to Total Assets is equal to the coefficient on the ratio of interest payments to profits (how to construct the test statistic, and what distribution it has under the null that the coefficient values are equal). .(13 pts) Using the logit model estimates below, Logit model: predicting corporate bankruptcy Explanatory Variable Coefficient Constant -4.71 Debt/Total Assets 0.018 int pmt/profits 0.013 a) what is the estimated probability of bankruptcy for a company that has Debt to Total Assets of 75 and a ratio of interest payments to profits of 40 (both values in percent, the units used in estimation)? b) Describe the steps that would be required to test the hypothesis that the coefficient on Debt to Total Assets is equal to the coefficient on the ratio of interest payments to profits (how to construct the test statistic, and what distribution it has under the null that the coefficient values are equal)
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