Barclay,Smith and Watts (1995)found That

question 19

Multiple Choice

Barclay,Smith and Watts (1995) found that:

• A)the relationship between leverage and the market-book value ratio was highly significant in a statistical sense but was not 'economically' significant.
• B)taxes do not have an important effect on corporate leverage decisions.
• C)their findings are consistent with the pecking order theory because they show that leverage is negatively related to profitability.
• D)leverage was positively related to the tangibility of assets and negatively related to the market-book value ratio in seven countries.

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Definitions:

F Distributed

Describes a type of probability distribution that arises in the analysis of variances, often used to determine if two population variances are equal.

Independent Samples

Samples in which the sample values of one group do not depend on the values of another, often used in hypothesis testing to compare two groups.

Normal Populations

Populations that follow a normal distribution, characterized by its bell-shaped curve, where the mean, median, and mode are all equal.

Equal Variances

Assuming that two or more populations have the same variance, often an assumption in statistical tests comparing populations.