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Question III From a sample of 209 firms, .32+ 0.280 log(sales) + 0.0174roe+ se =(0.32) (0.035) (0.0041) Where salary = salary of CEO sales =
Question III From a sample of 209 firms, .32+ 0.280 log(sales) + 0.0174roe+ se =(0.32) (0.035) (0.0041) Where salary = salary of CEO sales = annual firm sales roe = return on equity in percent ros = return on firm's stock 0.00024ros (0.00054) R2 =0.283 and where figures in the parentheses are the estimated standard error. a) Interpret the preceding regression taking into account any prior expectations that you may have about the signs of the various coefficients. b) Which of the coefficients are individually statistically significant at the 5 percent level? c) What is the overall significance of the regression? Which test do you use? And why? d) Can you interpret the coefficients of roe and ros as elasticity coefficients? Why or why not
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