OPLYING THE CONCEPTS 14.11 A financial analyst engaged in business valuation obtained financial data on 72 drug companies (Industry Group SIC 3 code: 283). The file Buscas Valuation contains the following variables: COMPANY-- Drug Company name PB fye-Price-to-book-value ratio (fiscal your ending) ROE Retum on cquity SGROWTH-Growth (GS5) a. Develop a regression model to predict price-lo-book-value ra- tio based on return on equity. h. Develop a regression model to predict price-to-book-value ra- tio based on growth. c. Develop a regression model to predict price-to-book-value ra- tio based on relum on equity and growth. d. Compute and interpret the adjusted r' for each of the three models. e. Which of these three models do you think is the best predictor of price-lo-book-value ratio? OPLYING THE CONCEPTS 14.11 A financial analyst engaged in business valuation obtained financial data on 72 drug companies (Industry Group SIC 3 code: 283). The file Buscas Valuation contains the following variables: COMPANY-- Drug Company name PB fye-Price-to-book-value ratio (fiscal your ending) ROE Retum on cquity SGROWTH-Growth (GS5) a. Develop a regression model to predict price-lo-book-value ra- tio based on return on equity. h. Develop a regression model to predict price-to-book-value ra- tio based on growth. c. Develop a regression model to predict price-to-book-value ra- tio based on relum on equity and growth. d. Compute and interpret the adjusted r' for each of the three models. e. Which of these three models do you think is the best predictor of price-lo-book-value ratio