Suppose You Wish to Detect a Difference in the Locations

question 79

Essay

Suppose you wish to detect a difference in the locations of two population distributions based on a paired-difference experiment consisting of n = 35 pairs.
a. Give the null and alternative hypotheses for the Wilcoxon signed-rank test.
b. Give the test statistic.
c. Give the rejection region for the test for = 0.05.
d. If = 339, what are your conclusions? [Note: = n(n + 1)/2].
e. Conduct the test using the large-sample z test. Compare your results with the nonparametric test results in the previous question.

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Definitions:

Flotation Cost

The total costs incurred by a company in offering its securities to the public, including underwriting, legal, and registration fees.

Target Capital Structure

The mix of debt, equity, and other financing sources a company aims to use to finance its operations and growth.

WACC

Weighted Average Cost of Capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets.

Cost of Equity

Cost of equity is the return a company requires to decide if an investment meets capital return requirements and can be seen as the return on equity that shareholders expect for their investment risk.