Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This was all the information I received from the question. Q2) (10 Points) You suspect that Earning per Share (EPS) and the natural log, Ln

image text in transcribed

This was all the information I received from the question.

Q2) (10 Points) You suspect that Earning per Share (EPS) and the natural log, Ln of Sales per Share (LnSPS) are related. After you generate a regression using 30 years of quarterly data you want to test for the presence of Heteroscedasticity. You sort the data by LnSPS and break it into three equal samples from Low to High and discard the middle third. a) Based on the following data does the GQ test indicate a problem Lower Revenue Sample: Higher Revenue Sample: Adjusted R = 0.863945 Std Error of Slope = 0.349713 Standard Deviation EPS Standard Deviation Revenue 0.217308 0.070951 b) Regardless of your conclusion above you decide to transform your data and run a WLS regression. Some of the key output is: WLS Regression Coefficent t Values Intercept 0.507052 3.7689 Slope 0.157212 2.1568 If you expect the market to report $2,525 Sales per Share next quarter what is your best estimate of EPS? Q2) (10 Points) You suspect that Earning per Share (EPS) and the natural log, Ln of Sales per Share (LnSPS) are related. After you generate a regression using 30 years of quarterly data you want to test for the presence of Heteroscedasticity. You sort the data by LnSPS and break it into three equal samples from Low to High and discard the middle third. a) Based on the following data does the GQ test indicate a problem Lower Revenue Sample: Higher Revenue Sample: Adjusted R = 0.863945 Std Error of Slope = 0.349713 Standard Deviation EPS Standard Deviation Revenue 0.217308 0.070951 b) Regardless of your conclusion above you decide to transform your data and run a WLS regression. Some of the key output is: WLS Regression Coefficent t Values Intercept 0.507052 3.7689 Slope 0.157212 2.1568 If you expect the market to report $2,525 Sales per Share next quarter what is your best estimate of EPS

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_2

Step: 3

blur-text-image_3

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

The Outsourcing Dilemma Whats Best For Internal Auditing

Authors: Larry E. Rittenberg, Institute Of Internal Auditors Research Foundation, Lee A. Campbell

1st Edition

0894133845, 978-0894133848

More Books

Students also viewed these Accounting questions

Question

=+(ADHD) and obsessive-compulsive disorder (OCD)?

Answered: 1 week ago