Math Problem Statement
Following is information on the price per share and the dividend for a sample of 30 companies. Calculate the regression equation that predicts price per share based on the annual dividend. (Round your answers to 4 decimal places.) Price = + dividend
Solution
The regression equation that predicts the price per share () based on the annual dividend () is:
Where:
- is the predicted price per share.
- is the annual dividend.
Let me know if you would like further details or have any questions!
Here are 5 related questions:
- How is the goodness of fit (R-squared value) of the regression model calculated?
- What does the slope (2.4050) indicate in the context of this model?
- Can we interpret the intercept (28.9367) economically?
- How would we test the significance of the regression model?
- What would be the predicted price for a company with an annual dividend of 15?
Tip: In linear regression, a higher R-squared value means that the independent variable explains more of the variance in the dependent variable.
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Math Problem Analysis
Mathematical Concepts
Linear Regression
Statistics
Formulas
P = 28.9367 + 2.4050 * D
Theorems
Least Squares Method
Suitable Grade Level
Undergraduate/Graduate
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