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SCENARIO 13-15
The superintendent of a school district wanted to predict the percentage of students passing a sixth- grade proficiency test.She obtained the data on percentage of students passing the proficiency test (% Passing), mean teacher salary in thousands of dollars (Salaries), and instructional spending per pupil in thousands of dollars (Spending) of 47 schools in the state.
Following is the multiple regression output with Y = % Passing as the dependent variable,
X1 =
Salaries and
X 2 = Spending:
-Referring to SCENARIO 13-15, you can conclude definitively that instructional spending per pupil individually has no impact on the mean percentage of students passing the proficiency test, considering the effect of mean teacher salary, at a 10% level of significance based solely on but not actually computing the 90% confidence interval estimate for 2 .
M&M Proposition II
It refers to a theory related to capital structure, stating that a firm's cost of equity increases with leverage because the risk to equity holders increases.
Business Risk
The exposure a company or investor has to various factors that can lower its profits or lead to a loss.
Indirect Bankruptcy Costs
Costs associated with bankruptcy that do not involve direct cash payments, such as damage to a company's reputation or loss of customers.
Optimal Capital Structure
The most favorable mix of debt and equity financing that minimizes the cost of capital and maximizes the value of the firm.
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