1. Suppose that you have following data: Variable Description CEO salary measured in thousands of $ Firm's sale measure in millions of $ Return on equity in percent Salary sales roe *Return on equity is a measure of financial performance calculated by dividing net income by shareholders' equity. Your estimated regression is given by log (salary) = 4.322 + 0.276 log(sale) + 0.0215roe-0.0008roe", R = 282, n = 209. (324) (0.033) (0.0129) (0.00026) a) Is the effect of all independent variables statistically equal to 0? b) Interpret the coefficient on log(sale). c) Interpret the effect of roe on log(salary).
1. Suppose that you have following data: Variable Description CEO salary measured in thousands of $ Firm's sale measure in millions of $ Return on equity in percent Salary sales roe *Return on equity is a measure of financial performance calculated by dividing net income by shareholders' equity. Your estimated regression is given by log (salary) = 4.322 + 0.276 log(sale) + 0.0215roe-0.0008roe", R = 282, n = 209. (324) (0.033) (0.0129) (0.00026) a) Is the effect of all independent variables statistically equal to 0? b) Interpret the coefficient on log(sale). c) Interpret the effect of roe on log(salary).
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter4A: Problems In Applying The Linear Regression Model
Section: Chapter Questions
Problem 2E
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