Amgen's Debt to Equity Ratio Is

question 83

Multiple Choice

Amgen's debt to equity ratio is .54 while Wal-Mart's is .68.By comparing these ratios we can conclude

• A) that Wal-Mart is in danger of bankruptcy.
• B) that Amgen uses too little debt financing.
• C) that Wal-Mart uses too little equity financing.
• D) very little because the firm's are in different industries.

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Definitions:

Parsimony

The principle of using the simplest or least complicated explanatory means necessary to adequately account for observed phenomena, often used in model selection.

Regression Model

A statistical technique for estimating the relationships among variables, often used for prediction and forecasting.

T-statistic

A type of statistic used in hypothesis testing, calculated from sample data to determine whether to reject the null hypothesis.

Correlation Coefficient

The correlation coefficient is a statistical measure that calculates the strength and direction of a linear relationship between two variables.