Question
1.A financial consultant is interested in the differences in capital structure within different firm sizes in a certain industry.The consultant surveys a group of firms
1.A financial consultant is interested in the differences in capital structure within different firm sizes in a certain industry.The consultant surveys a group of firms with assets of different amounts and divides the firms into three groups.Each firm is classified according to whether its total debt is greater than stockholders' equity or whether its total debt is less than stockholders' equity.The results of the survey are:
Firm Asset Size (in $ thousands)
<500500-2,0002,000 +Total
Debt < equity710825
Debt > equity 1018937
Total17281762
Do the three firm sizes have the same capital structure?Use the 0.10 significance level.
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