A financial analyst engaged in business valuation obtained financial data on 71 drug companies. Let Y correspond to theprice-to-book value ratio, X1 correspond to the return on equity, and X2 correspond to the growth percentage. Use the accompanying data to complete parts a. through e. below.

Price/Book Value Ratio Return on Equity Growth% 1.565 13.052 6.379 8.212 11.903 135.715 2.009 12.303 0.192 6.503 25.068 14.149 1.357 8.748 22.738 3.288 38.017 19.086 2.362 25.715 24.534 5.345 19.763 11.621 2.381 22.868 49.866 7.669 69.659 36.699 0.469 3.703 41.115 2.587 9.204 28.981 7.646 29.292 51.975 5.235 17.656 25.228 2.049 29.358 23.883 4.836 31.442 9.524 2.191 14.811 18.481 4.153 12.067 39.199 1.902 14.248 39.405 1.417 14.019 27.151 2.055 14.925 13.231 4.972 20.637 17.282 2.313 14.971 15.985 2.031 5.556 16.805 2.837 11.151 8.364 1.811 16.184 18.321 5.576 23.974 16.691 4.685 14.638 46.452 2.549 6.111 34.041 1.655 19.021 8.588 8.475 38.944 15.172 2.243 15.116 25.076 2.946 19.707 0.284 7.398 18.305 3.315 3.355 20.597 9.533 2.804 34.748 7.101 2.383 15.548 9.435 1.206 10.249 4.619 3.048 23.596 3.986 10.217 91.519 13.234 2.116 1.548 15.964 1.591 9.486 5.782 2.093 19.387 -0.002 7.251 4.949 102.644 1.244 42.807 1.649 5.776 90.814 74.114 6.552 19.325 9.077 2.616 27.244 34.417 3.406 13.047 12.181 6.903 24.637 11.635 13.582 81.885 24.563 4.078 1.369 20.261 7.232 3.707 22.358 6.064 31.446 49.905 1.123 5.111 13.198 9.398 47.779 61.148 1.314 13.442 10.888 0.986 36.088 8.994 3.831 28.721 71.179 3.513 18.083 51.728 2.289 13.982 16.977 10.174 133.074 171.287 4.225 21.963 8.507 8.545 11.349 247.696 1.998 17.306 10.866 4.148 19.335 6.442 2.378 8.563 24.566 3.039 18.492 14.291 4.401 21.648 5.883 4.929 49.435 31.345 2.224 19.397 3.992

a. Develop a regression model to predictprice-to-book-value ratio based on return on equity.

Yi=____ + ____X1i

(Round to four decimal places as needed.)

b. Develop a regression model to predictprice-to-book-value ratio based on growth.

Yi =____ + ____X2i

(Round to four decimal places as needed.)

c. Develop a regression model to predictprice-to-book-value ratio based on return on equity and growth.

Yi =____ + ____X1i + ____X2i

(Round to four decimal places as needed.)

d. Compute and interpret the adjusted r2 for each of the three models.

Start with the part (a) model.

The adjusted r2 shows that ___% of the variation in ________ is explained by ______ _____ correcting for the number of independent variables in the model.

(Round to one decimal place as needed.)

Compute and interpret the adjusted r2 for the part (b) model.

The adjusted r2 shows that ___% of the variation in ____ is explained by ____ ____ correcting for the number of independent variables in the model.

(Round to one decimal place as needed.)

Compute and interpret the adjusted r2 for the part (c) model.

The adjusted r2 shows that ____%of the variation in ____ ____ is explained by ____ ____ correcting for the number of independent variables in the model.

(Round to one decimal place as needed.)

e. Which of these three models do you think is the best predictor of price-to-book-value ratio?

The model from ___ is the best predictor of price-to-book-value ratio because it has the ____ value of ____.