Question
The debt -to-capital ratio of accompany signifies the amount of financial risk a company is taking. If the ratio is high ,the risk is high.
The debt -to-capital ratio of accompany signifies the amount of financial risk a company is taking. If the ratio is high ,the risk is high. The data on debt-to-capital ratio and return on capital for 24 healthcare companies are to be collected by you from a secondary source. Assume that this is a random sample of healthcare companies . Regress return on capital against debt-to-capital ratio , then answer the following questions :
a. What is the regression equation?
b. Give a 95 % confidence interval for the slope.
c. est the Null Hypothesis "debt-to-capital ratio does not affect return on capital of healthcare companies" at an alpha of 5%.report the P value.
d. est the Null Hypothesis "The slope of the regression Line is Zero" at an alpha of 5%. Report the P value.
e. Construct a normal probability plot. Are the residuals normally distributed?
f. Give a 95% prediction interval for the expected return on capital for a healthcare company with zero debt.
g.Which two companies in the data set produce the two largest errors?
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