Jensen, Solberg, and Zorn investigated the relationship of insider ownership, debt, and dividend…

1. In general, when selecting factors for a study, you want to be sure of which of these? a. they ha
December 17, 2021
A clinical trial compares the new drug described in Exercise A clinical trial compares the new drug.
December 17, 2021

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 three 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. Comment on the regression coefficients.

 

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

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

 
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