Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In the definition of Analyst following, 1 is added to the number of analysts following a company because some companies are not followed by any

image text in transcribed
In the definition of Analyst following, 1 is added to the number of analysts following a company because some companies are not followed by any analysts, and the natural log of 0 is indeterminate. The following table gives the colicient estimates of the above regression model for a randomly selected sample of 500 companie The data are for the year 2002. Coefficient Estimates from Regressing Analyst Following on Size and Debt-to-Equity Ratio Coefficient Standard Error t-Statistic Intercept -0.2845 0.1080 -2.6343 Size. 0.3199 0.0152 21.0461 (D/E); -0.1895 0.0620 -3.0565 12 = 500 Soure: First Call/ Thomson Financial, Compustat. A. Consider two companies, both of which have a debt-to-equity ratio of 0.7The first company has a market capitalization of $100 million, and the second company has a market capitalization of $1 billion. Based on the above estimates, how many more analysts will follow the second company than therst company? B. Suppose they-value reported for the estimated cofficient on (D/E), is 0.00236. State the interpretation of 0 00236

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

China Under Mao A Revolution Derailed

Authors: Andrew G Walder

1st Edition

0674975499, 9780674975491

More Books

Students also viewed these Economics questions

Question

Explain the concept of employment at will.

Answered: 1 week ago

Question

Discuss compensation for sales representatives.

Answered: 1 week ago

Question

Explain termination of employment.

Answered: 1 week ago