Question
You are interested in the determinants of analyst following for publicly traded companies. You conduct a regression on 92 observations, specified as follows: Analystsi =
You are interested in the determinants of analyst following for publicly traded companies. You conduct a regression on 92 observations, specified as follows:
Analystsi = b0 + b1 (D/E)i + b2 Sizei + error
Where Analysts is the natural log of (1 + number of analysts), D/E is the debt to equity ratio of the company, and Size is the natural log of the company's market cap, in millions.
Your regression results are as follows:
Coefficient | Standard error | |
Incercept | -0.36 | 0.05 |
D/E | -0.18 | 0.19 |
Size | 0.28 | 0.12 |
Based on this information, what would be the predicted number of analysts following a company with a debt to equity ratio of 0.24 and a market cap of 104 million dollars?
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