Not what you're looking for?
A financial analyst is examining the relationship between stock prices and earnings per share. She chooses sixteen publicly traded companies at random and records for each the company's current stock price and the company's earnings per share reported for the past 12 months. Her data are given below, with x denoting the earnings per share from the previous year, and y denoting the current stock price (both in dollars). Based on these data, she computes the least-squares regression line to be ^y=0.186 + 0.045x
Earnings per Current stock price
share, x (in dollars) y, (in dollars)
For these data, values for earnings per share that are less than the mean of the values for earnings per share tend to be paired with current stock prices that are greater than or less than the mean of the current stock prices?
According to the regression equation, for an increase of one dollar in earnings per share, there is a corresponding increase of how many dollars in current stock price?
What was the observed current stock price (in dollars) when the earnings per share was 30.83 dollars?
From the regression equation, what is the predicted current stock price (in dollars) when the earnings per share is 30.83 dollars? (Round your answer to at least two decimal places)
Purchase this Solution
Just over 100 words explain how to find the predicted current stock price from a regression equation.
(i) Since the slope of the regression is positive, we can say that the values for earnings per share that are less than the mean of the values for ...
Purchase this Solution
Free BrainMass Quizzes
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.