A Regression Analysis Involved 17 Independent Variables and 697 Observations

question 25

Multiple Choice

A regression analysis involved 17 independent variables and 697 observations. The critical value of t for testing the significance of each of the independent variable's coefficients will have _____.

• A) 696 degrees of freedom
• B) 16 degrees of freedom
• C) 713 degrees of freedom
• D) 714 degrees of freedom

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Definitions:

Earnings Before Interest and Taxes

An indicator of a company's profitability, calculated as revenue minus expenses excluding tax and interest.

Debt Ratio

A financial ratio that measures the extent of a company’s leverage, calculated by dividing total liabilities by total assets.

Capital Structure

The mixture of debt and equity that a company uses to finance its operations and growth.

ROE

Return on Equity; a financial ratio that measures the profitability of a firm by dividing net income by shareholder's equity.