Question
The tables of data below show the results of a multiple regression run on the top 150 ASX-listed companies on 30 September 2022. All companies
The tables of data below show the results of a multiple regression run on the top 150 ASX-listed companies on 30 September 2022. All companies have 30 June balance dates. The regression is of the form:
Pi = a + b1EPSi + b2BVEi + error.
Where Pi = share price of company i at 30 September 2022 EPSi = earnings per share of company i at 30 June 2022 BVEi = book value of equity per share of company i at 30 June 2022
The regression is based on the Ohlson (1995) model.
Required:
(a) Are EPS and BVE significantly associated with Price, and is the association positive or negative?
(b) Which of EPS and BVE has the larger association with Price?
(c) How much variation in Price is explained by variation in EPS and BVE. Is that variation high or low?
a. Predictors: (Constant), BVE, EPS a. Dependent Variable: Price b. Predictors: (Constant), BVE, EPS a. Dependent Variable: Price a. Predictors: (Constant), BVE, EPS a. Dependent Variable: Price b. Predictors: (Constant), BVE, EPS a. Dependent Variable: PriceStep by Step Solution
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