Question

1. Use the Financial database from “Excel Databases.xls” on Blackboard. Use Total Revenues, Total Assets, Return on Equity, Earnings Per Share, Average Yield, and Dividends Per Share to predict the average P/E ratio for a company. Use Excel to perform a forward selection regression analysis. Assume a 5% level of significance. Identify observation 2 in the original dataset. Use the observed values from observation 2 to find the predicted value y-hat based on your final model selected. Write your answer as a number and round your final answer to a whole number.

https://drive.google.com/file/d/19TI3HId0greXS0nkmDuoITv1IMPF_TUK/view?usp=sharing

Need help please soon if possible, thank you

Answer 1

For 1 variable

We will choose the best model with the highest R2 value and the outputs are given by

Variable Name	R2 squared value	Adj R2 value
Earning Per Share	0.086535	0.077214
Earning Per Share, Dividends per Share	0.103976	0.085501
Earning Per Share, Dividends per Share, Average Yield	0.180303	0.154687
Earning Per Share, Dividends per Share, Average Yield, Return on Equity	0.183215	0.148824
Earning Per Share, Dividends per Share, Average Yield, Return on Equity, Total Assests	0.184669	0.141301
Earning Per Share, Dividends per Share, Average Yield, Return on Equity, Total Assests, Total Revenues	0.187297	0.134865

So, the final model will be based on maximum adjusted R2 value i.e. 3rd model consisting of Earning Per Share, Dividends per Share, Average Yield.

Now, the predicted y-hat value based on the final model will be