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Find the Regression Line Using Excel for Mr. William Profit

Mr. William Profit is studying companies going public for the first time. He is particularly interested in the relationship between the size of the offering and the price per share. A sample of 15 companies that recently went public revealed the following information.

Company Size ($ millions), X Price per Share, Y Company Size ($ millions), X Price per Share Y

1 9.0 10.8 9 160.7 11.3
2 94.4 11.3 10 96.5 10.6
3 27.3 11.2 11 83.0 10.5
4 179.2 11.1 12 23.5 10.3
5 71.9 11.1 13 58.7 10.7
6 97.9 11.2 14 93.8 11.0
7 93.5 11.0 15 34.4 10.8
8 70.0 10.7

Determine the regression equation.

Determine the coefficient of determination. Do you think Mr. Profit should be satisfied with using the size of the offering as the independent variable?

Solution Summary

Mr. William Profit is studying companies going public for the first time. He is particularly interested in the relationship between the size of the offering and the price per share. A sample of 15 companies that recently went public revealed the following information.

$2.19