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2. (10 points) An analyst intends to investigate the effect of research and development (R&D) expenditure (RND stands for R&D expenditure scaled by net sales)

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2. (10 points) An analyst intends to investigate the effect of research and development (R&D) expenditure (RND stands for R&D expenditure scaled by net sales) on corporate valuation (Tobin's Q, and Q for short). Answer the following questions Company (l) 6pts Find the equation of the regression line giving the corporate valuation (Q) is a linear mction of R&D expenditure (2) 2pts Using the regression line you found in your answer to question (2.1), what is the expected Q of a company with R&D expenditure of 1.6? (3) 2pts Which of the 8 companies will be considered overvalued according to their R&D using this model

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