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Primary share earnings

67. The following data show that trailing 52 week primary share earnings and books values as reported by 10 companies(the wall Street Journal, March 13/2000).

Company -Earnings-Book Value
Am Elec -25.21 -2.69
Columbia En -23.20 -3.01
Con Ed -25.19 -3.13
Duke Energy -20.17 -2.25
Edison Int'l -13.55 -1.79
Enron Cp. -7.44 -1.27
Peco -13.61 -3.15
Pub Sv Ent -21.86 -3.29
Southn Co. -8.77 -1.86
Unicom -23.22 -2.74

a. Develop a scatter diagram for the data with book value on the x-axis.
b. What is the sample correlation coefficient, and what dose it tell you about the relationship between the earning per share and the book value?

Solution Summary

67. The following data show that trailing 52 week primary share earnings and books values as reported by 10 companies(the wall Street Journal, March 13/2000).

Company -Earnings-Book Value
Am Elec -25.21 -2.69
Columbia En -23.20 -3.01
Con Ed -25.19 -3.13
Duke Energy -20.17 -2.25
Edison Int'l -13.55 -1.79
Enron Cp. -7.44 -1.27
Peco -13.61 -3.15
Pub Sv Ent -21.86 -3.29
Southn Co. -8.77 -1.86
Unicom -23.22 -2.74

a. Develop a scatter diagram for the data with book value on the x-axis.
b. What is the sample correlation coefficient, and what dose it tell you about the relationship between the earning per share and the book value?

$2.19