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Refer to the Financial Data Set (available in the Excel Assignments & Data sets module on CANVAS) A. Use excel to find the regression equation to predict the average PE ratio from the other variables presented. B. From your output, write the result in the form of an equation. C. What is the value of R2? Based on R2 and the global test, does this relationship appear to be significant at the .05 level of significance? D. Conduct a test of hypothesis on each individual variable at the .10 level of significance. Are there any variables that should be deleted? E. Use excel to find the regression equation again, this time use only those variables that appear to have a significant relationship (as determined in part D) to the average PE ratio.

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5219 Company AFLAC Albertson's Allstate Amerada Hess American General American Stores Amoco Arco Chemical Ashland Atlantic Richfield Bausch & Lomb Baxter International Bristol-Myers Squibb Burlington Coat Central Maine Power Chevron CIGNA Cinergy Dayton Hudson Dillard's Type Total Revenues Total Assets Return on Equity Earnings per Share Average Yield Dividends per Share Average P/E Ratio 6 7251 29454 17.1 2.08 0.9 0.22 11.5 4 14690 21.4 2.08 1.6 0.63 19 6 20106 80918 20.1 3.56 1 0.36 10.6 7 8340 7935 0.2 0.08 1.1 0.6 698.3 6 3362 80620 7.1 2.19 3 1.4 21.2 4 19139 8536 12.2 1.01 1.4 0.34 23.5 7 36287 32489 16.7 2.76 3.1 1.4 16.1 3995 4116 6.2 1.14 6.1 2.8 40.4 7 14319 7777 9.5 3.8 2.3 1.1 12.4 7 19272 25322 21.8 5.41 3.8 2.83 3.8 5 1916 6 0.89 2.6 1.04 2.6 6138 8707 11.5 1.06 2.3 1.13 47.2 5 16701 14977 44.4 3.14 2 1.52 24.1 1777 775 12.3 1.18 0.1 0.02 12.9 954 2299 2.4 0.16 7.8 0.9 79.6 7 41950 35473 18.6 4.95 3 2.28 15.2 6 14935 108199 13.7 4.88 2 1.1 11.4 3 4353 8858 13.3 1.59 5.1 1.8 22.4 1 27757 14191 18 1.7 1.2 0.33 16.2 1 6817 5592 9.2 2.31 0.4 0.16 15.7 2773 5219 Company AFLAC Albertson's Allstate Amerada Hess American General American Stores Amoco Arco Chemical Ashland Atlantic Richfield Bausch & Lomb Baxter International Bristol-Myers Squibb Burlington Coat Central Maine Power Chevron CIGNA Cinergy Dayton Hudson Dillard's Type Total Revenues Total Assets Return on Equity Earnings per Share Average Yield Dividends per Share Average P/E Ratio 6 7251 29454 17.1 2.08 0.9 0.22 11.5 4 14690 21.4 2.08 1.6 0.63 19 6 20106 80918 20.1 3.56 1 0.36 10.6 7 8340 7935 0.2 0.08 1.1 0.6 698.3 6 3362 80620 7.1 2.19 3 1.4 21.2 4 19139 8536 12.2 1.01 1.4 0.34 23.5 7 36287 32489 16.7 2.76 3.1 1.4 16.1 3995 4116 6.2 1.14 6.1 2.8 40.4 7 14319 7777 9.5 3.8 2.3 1.1 12.4 7 19272 25322 21.8 5.41 3.8 2.83 3.8 5 1916 6 0.89 2.6 1.04 2.6 6138 8707 11.5 1.06 2.3 1.13 47.2 5 16701 14977 44.4 3.14 2 1.52 24.1 1777 775 12.3 1.18 0.1 0.02 12.9 954 2299 2.4 0.16 7.8 0.9 79.6 7 41950 35473 18.6 4.95 3 2.28 15.2 6 14935 108199 13.7 4.88 2 1.1 11.4 3 4353 8858 13.3 1.59 5.1 1.8 22.4 1 27757 14191 18 1.7 1.2 0.33 16.2 1 6817 5592 9.2 2.31 0.4 0.16 15.7 2773

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