TABLE 13-9
It Is Believed That, the Average Numbers of Hours

question 36

Multiple Choice

TABLE 13-9
It is believed that, the average numbers of hours spent studying per day (HOURS) during undergraduate education should have a positive linear relationship with the starting salary (SALARY, measured in thousands of dollars per month) after graduation. Given below is the Excel output from regressing starting salary on number of hours spent studying per day for a sample of 51 students. NOTE: Some of the numbers in the output are purposely erased.
$\begin{array}{lc}\text { Regression Statistics } & \\\hline \text { Multiple R } & 0.8857 \\\text { R Square } & 0.7845 \\\text { Adjusted R Square } & 0.7801 \\\text { Standard Error } & 1.3704 \\\text { Observations } & 51\end{array}$
$\text { ANOVA }$
$\begin{array}{llcc}\hline&\text { df }&\text { SS } &\text { MS }&\text {F }&\text { Significance F } \\\text { Regression } & 1 & 335.0472 & 335.0473 & 178.3859 \\\text { Residual } & & & 1.8782 & \\\text { Total } & 50 & 427.0798 & &\end{array}$
-Referring to Table 13-9, the degrees of freedom for the F test on whether HOURS affects SALARY are $$\begin{array} { l r c c c r r } & \text { Coefficients } & \text { Standaad Error } &t \text { Stat } & p \text {-value } & \text { Lower 95\% } & \text { Upper 95\% } \\\hline \text { Intercept } & - 1.8940 & 0.4018 & - 4.7134 & 2.051 \mathrm { E } - 05 & - 2.7015 & - 1.0865 \\\text { Hours } & 0.9795 & 0.0733 & 13.3561 & 5.944 \mathrm { E } - 18 & 0.8321 & 1.1269 \\\hline\end{array}$$

• A) 50, 1.
• B) 1, 50.
• C) 49, 1.
• D) 1, 49.

Predict the new stock price after a stock split based on the previous price and expected market value increase.

Describe an optimal distribution policy for a firm in terms of maximizing stock price.

Compare the effects of stock dividends and stock splits on shareholder's wealth.

Recognize the impact of stock splits and reverse stock splits on a firm's stock price.

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service, often used to allocate manufacturing overhead.

Machine-Hours

A measure of production activity that quantifies the total hours a machine is operated within a given period.

Forming Department

A division within a manufacturing process where raw materials are shaped into finished products or components.

Finishing Department

The section in a manufacturing process where products are completed, tested, and prepared for delivery.