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- X Business Valuation Data Price/Book Value Ratio Return on Equity Growth % 1.456 13.059 6.518 8.363 11.838 135.602 2.047 12.339 0.066 6.503 25.149 14.118

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- X Business Valuation Data Price/Book Value Ratio Return on Equity Growth % 1.456 13.059 6.518 8.363 11.838 135.602 2.047 12.339 0.066 6.503 25.149 14.118 1.204 8.758 22.717 3.194 38.046 19.064 2.355 25.573 24.532 5.321 19.711 11.647 2.333 22.841 49.903 7.646 69.632 36.706 0.409 3.792 41.089 2.471 9.083 28.972 7.629 29.274 52.099 5.108 17.844 25.113 2.074 29.334 23.852 4.761 31.399 9.591 2.132 14.776 18.431 4.053 12.021 39.175 1.983 14.221 39.461 1.539 14.116 27.085 1.938 14.823 13.171 5.008 20.532 17.232 2.429 14.948 15.842 2.089 5.706 16.717 3.016 11.212 8.348 1.764 16.114 18.339 5.595 24.031 16.696 4.608 14.753 46.486 2.606 6.155 34.182 1.727 19.025 8.519 8.479 38.944 15.082 2.309 15.192 25.177 2.831 19.763 0.306 7.454 18.448 3.349 3.217 20.701 9.473 2.898 34.616 7.021 2.554 15.582 9.371 1.242 10.272 4.627 3.052 23.492 4.111 10.263 91.619 13.404 1.943 1.606 15.873 1.597 9.486 5.656 1.977 19.342 0.068 7.166 4.995 102.793 1.386 42.842 1.558 5.736 90.789 74.028 6.389 19.463 9.082 2.633 27.267 34.443 3.416 12.915 12.143 6.838 24.638 11.533 13.579 81.895 24.468 3.985 1.457 20.207 7.179 3.712 22.312 6.145 31.498 49.878 1.006 4.975 13.198 9.312 47.866 61.177 1.338 13.286 10.887 1.018 35.942 9.082 3.864 28.711 70.995 3.519 18.166 51.731 2.125 14.075 16.946 10.049 133.069 171.239 4.306 21.944 8.453 8.549 11.225 247.663 1.991 17.189 10.756 4.074 19.343 6.327 2.275 8.591 24.5951.991 17.189 10.756 4.074 19.343 6.327 2.275 8.591 24.595 3.023 18.527 14.188 4.539 21.533 5.702 4.919 49.426 31.389 2.239 19.406 3.984A financial analyst engaged in business valuation obtained financial data on ?1 drug companies. Let Y correspond to the prioe-to-book value ratio, X1 correspond to the return on equity, and X2 correspond to the growth percentage. Use the accompanying data to complete parts a. through a. below. @ Click the icon to view the business valuation data. E) a. Develop a regression model to predict price-tobook-value ratio based on return on equity. A (Round to four decimal places as needed.) b. Develop a regression model to predict price-to-book-value ratio based on growth. A Yi = 3.1298 + .0309 X21- (Round to four decimal places as needed.) c. Develop a regression model to predict price-tobook-value ratio based on return on equity and growth. A tri = 1.9414 + .0593 X\"- + .0225 X2i (Round to four decimal places as needed.) d. Compute and interpret the adjusted r2 for each of the three models. Start with the part (a) model. The adjusted r2 shows that 33.2 % of the variation in price-to-book-value is explained by return on equity after correcting for the number of independent variables in the modei. (Round to one decimal place as needed.) Compute and interpret the adjusted r2 for the part (b) model. The adjusted r2 shows that 19.2 % of the variation in prioe-tobook-value is explained by growth after correcting for the number of independent variables in the modei. (Round to one decimal place as needed.) Compute and interpret the adjusted r2 for the part (0) model. The adjusted r2 shows that D% of the variation in VI is explained by 7' l 7' correcting for the number of independent variables in the model. (Round to one decimal place as needed.)

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