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14.11 A financial analyst engaged in business valuation obtained financial data on 72 drug companies (Industry Group SIC 3 code: 283). The file contains the
14.11 A financial analyst engaged in business valuation obtained financial data on 72 drug companies (Industry Group SIC 3 code: 283). The file contains the following variables: COMPANY - Drug Company name PB fye-Price-to-book-value ratio (fiscal year ending) ROE-Return on equity SGROWTH-Growth (GS5) a. Develop a regression model to predict price-to-book-value ratio based on return on equicy. b. Develop a regression model to predict price-to-book-value ratio based on growth. c. Develop a regression model to predict price-to-book-yahue ratio based on return on equity and growth. d. Compute and interpret the adjusted r2 for each of the three models. e. Which of these three models do you think is the best predictor of price-to-book-value ratio
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