A Proofreader Checked 160 Ads for Grammatical Errors

question 22

Multiple Choice

A proofreader checked 160 ads for grammatical errors.The distribution obtained is shown below. At α = .01,what decision would we reach in a goodness-of-fit test to see whether this sample came from a uniform distribution?

• A)Reject the null and conclude the distribution is not uniform.
• B)Conclude that there is insufficient evidence to reject the null.
• C)No conclusion can be made due to small expected frequencies.
• D)No conclusion can be made due to inadequate sample size.

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Definitions:

Levered Cost of Equity

The rate of return required by shareholders of a company that employs debt in its capital structure, reflecting the increased risk.

WACC

A method for calculating a business's cost of capital, the Weighted Average Cost of Capital involves proportionally weighting each form of capital.

Miller Model

A theory on dividend policy that integrates the effect of personal income tax to contrast the Modigliani-Miller dividend irrelevance theory.

Personal Taxes

Taxes levied on the income or assets of individuals, as opposed to taxes imposed on companies.