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26. The following regression was run using all NYSE firms in 1995 YIELD = 0.0478 -0.0157 BETA + 0.0000008 MKTCAP +0.006797 DBTRATIO + 0.0002 ROE

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26. The following regression was run using all NYSE firms in 1995 YIELD = 0.0478 -0.0157 BETA + 0.0000008 MKTCAP +0.006797 DBTRATIO + 0.0002 ROE -0.09 NCEX/TA R2 = 12.88% where BETA = beta of the stock, MKTCAP = market value of equity + book value of debt, DBTRATIO= book value of debt/MKTCAP, ROE = return on eq- uity in 1994, and NCEX/TA = (capital expenditures - depreciation)/total assets. The corresponding values for Black and Decker, in 1995, were as follows: Beta = 1.30 MKTCAP = $5,500 million DBTRATIO = 35% ROE = 14.5% NCEX/TA = 4.00% Black and Decker had a dividend yield of 1.3% and a dividend payout ratio of 24% in 1995. a. Estimate the dividend yield for Black and Decker, based on the regression. b. Why might your answer be different using this approach than the answer to the prior question, where you used only the comparable firms

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