Jensen, Solberg, and Zorn investigated the relationship of insider ownership, debt, and dividend policies in companies. One of their findings was that firms with high insider ownership choose lower levels of both debt and dividends. Shown here is a sample of data of these 3 variables for 11 different industries, Use the data to develop the equation of the regression model to predict insider ownership by debt ratio and dividend payout. Insider Debt Dividend Industry Ownership Ratio Payout Mining 8.2 14.2 10.4 Food and Beverage 18.4 20.8 14.3 Furniture 11.8 18.6 12.1 Publishing 28.0 18.5 11.8 Petroleum refining 7.4 28.2 10.6 Glass and cement 15.4 24.7 12.6 Motor vehicle 15.7 15.6 12.6 18.4 21.7 7.2 Department store 13.4 23.0 11.3 Restaurant 18.1 46.7 4.1 Amusement 10.0 35.8 9.0 Hospital

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ISBN:9781305115545
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Publisher:James Stewart, Lothar Redlin, Saleem Watson
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Jensen, Solberg, and Zorn investigated the relationship of insider ownership, debt, and dividend policies in companies. One of their
findings was that firms with high insider ownership choose lower levels of both debt and dividends. Shown here is a sample of data of
these 3 variables for 11 different industries. Use the data to develop the equation of the regression model to predict insider ownership
by debt ratio and dividend payout.
Insider
Debt Dividend
Industry
Ownership Ratio
Payout
Mining
8.2
14.2
10.4
Food and Beverage
18.4
20.8
14.3
Furniture
11.8
18.6
12.1
Publishing
28.0
18.5
11.8
Petroleum refining
7.4
28.2
10.6
Glass and cement
15.4
24.7
12.6
Motor vehicle
15.7
15.6
12.6
18.4
21.7
7.2
Department store
13.4
23.0
11.3
Restaurant
18.1
46.7
4.1
Amusement
10.0
35.8
9.0
Hospital
Transcribed Image Text:Jensen, Solberg, and Zorn investigated the relationship of insider ownership, debt, and dividend policies in companies. One of their findings was that firms with high insider ownership choose lower levels of both debt and dividends. Shown here is a sample of data of these 3 variables for 11 different industries. Use the data to develop the equation of the regression model to predict insider ownership by debt ratio and dividend payout. Insider Debt Dividend Industry Ownership Ratio Payout Mining 8.2 14.2 10.4 Food and Beverage 18.4 20.8 14.3 Furniture 11.8 18.6 12.1 Publishing 28.0 18.5 11.8 Petroleum refining 7.4 28.2 10.6 Glass and cement 15.4 24.7 12.6 Motor vehicle 15.7 15.6 12.6 18.4 21.7 7.2 Department store 13.4 23.0 11.3 Restaurant 18.1 46.7 4.1 Amusement 10.0 35.8 9.0 Hospital
Motor vehicle
15.7
15.6
12.6
Department store
18.4
21.7
7.2
Restaurant
13.4
23.0
11.3
Amusement
18.1
46.7
4.1
Hospital
10.0
35.8
9.0
(Round all answers to 4 decimal places, eg. 1.7589)
The regression model is:
Insider Ownership =
Debt Ratio-
Dividend Payout
Appendix A Statistical Tables
eTextbook and Media
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Transcribed Image Text:Motor vehicle 15.7 15.6 12.6 Department store 18.4 21.7 7.2 Restaurant 13.4 23.0 11.3 Amusement 18.1 46.7 4.1 Hospital 10.0 35.8 9.0 (Round all answers to 4 decimal places, eg. 1.7589) The regression model is: Insider Ownership = Debt Ratio- Dividend Payout Appendix A Statistical Tables eTextbook and Media Attempts: 0 of 1 used Submit Answer Save for Later MacBook Air
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