SUMMARY OUTPUT

Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations

0.963545872
0.928420648
0.91740844
1.675331767
16

ANOVA
df
Regression
Residual
Total

SS
MS
F
Significance F
2 473.2624 236.6312 84.30831
3.6E-08
13 36.48757 2.806737
15
509.75

Coefficients
Standard Error t Stat
P-value Lower 95% Upper 95%
-9.953670661 3.405425 -2.92289 0.011875 -17.3106
-2.5967
0.476231657
0.1863 2.556257 0.023908 0.073754 0.878709
11.19432444 0.877216 12.76119 9.96E-09 9.299213 13.08944

Intercept
Return_AverageEquity
Annual_DividendRate

RESIDUAL OUTPUT
Observation
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Predicted Stock_Price
22.98930873
31.06838681
21.09425239
22.51307707
18.82577662
14.29112949
31.47783082
14.58616267
26.20967171
25.99014427
28.62915897
18.06380597
30.06772423
26.39029408
29.18147247
20.62180368

Residuals
0.010691
2.931613
-1.09425
1.486923
1.174223
-1.29113
1.522169
0.413837
-0.20967
-0.99014
-2.62916
1.936194
-2.06772
-1.39029
0.818528
-0.6218

PROBLEM 10 0F CHAPTER 11
ANALYSIS OF MULTIPLE REGRESSION (Answers to all the problems are part of the
analysis)
From the regression results it can be inferred that
1. Stock price varies positively with respect to Return average equity and annual
dividend rate parameters as it can be seen that the values of the coefficients of
the two independent parameters are positive.
2. If we consider Rsquare value, it is more than the values of regression
calculated individually.
Lower 95.0%
Upper 95.0%
-17.3106
-2.5967
0.073754 0.878709
9.299213 13.08944

3. The P-value as it can be seen is more significant as it is less than 0.05.

4.As adjusted Rsquare value gives a better projection of the results, the value in
the multiple regression is more than the simple regression values.
5.Standard error value is the least if multiple regression results are considered

problems are part of the

erage equity and annual

es of the coefficients of

s of regression

less than 0.05.

the results, the value in

esults are considered

SUMMARY OUTPUT
Regression Statistics

Multiple R 0.178222
R Square
0.031763
Adjusted R Square
-0.0374
Standard Error
5.937525
Observations
16
ANOVA
df
Regression
Residual
Total

SS
MS
1 16.19121 16.19121
14 493.5588 35.2542
15
509.75

F
Significance F
0.45927 0.509011

Coefficients
Standard Error t Stat
P-value Lower 95% Upper 95%Lower 95.0%
Upper 95.0%
Intercept 17.63621 9.324802 1.891323 0.079454
-2.3635 37.63592
-2.3635 37.63592
Return_AverageEquity
0.447426 0.660217 0.677695 0.509011
-0.9686 1.86345
-0.9686 1.86345

RESIDUAL OUTPUT
Observation
Predicted Stock_Price
Residuals
1 23.76594 -0.76594
2 23.36326 10.63674
3 20.72345 -0.72345
4 23.31851 0.681486
5 24.48182 -4.48182
6 23.58697
-10.587
7 24.16862 8.831377
8 24.70553 -9.70553
9 23.00532 2.994683
10 24.48182 0.518179
11 24.43708 1.562922
12 23.76594 -3.76594
13 24.52656 3.473437
14 24.43708 0.562922
15 25.37667 4.623328
16 23.85543 -3.85543

a
b

17.63621
0.447426
ycap=17.636+0.447426*x

R square

Upper 95.0%

0.031763

Return_Av
erageEqui
tyStock_Price
13.7
$23
12.8
$34
6.9
$20
12.7
$24
15.3
$20
13.3
$13
14.6
$33
15.8
$15
12.0
$26
15.3
$25
15.2
$26
13.7
$20
15.4
$28
15.2
$25
17.3
$30
13.9
$20
$24

y cap
y-ycap
23.76594
-$1
23.36326
$11
20.72345
-$1
23.31851
$1
24.48182
-$4
23.58697
-$11
24.16862
$9
24.70553
-$10
23.00532
$3
24.48182
$1
24.43708
$2
23.76594
-$4
24.52656
$3
24.43708
$1
25.37667
$5
23.85543
-$4

y-ybar
-$1
$10
-$4
$0
-$4
-$11
$9
-$9
$2
$1
$2
-$4
$4
$1
$6
-$4

sq(y-ycap)
0.586664
113.1403
0.523374
0.464423
20.08672
112.0839
77.99322
94.19738
8.968129
0.26851
2.442724
14.1823
12.06476
0.316881
21.37516
14.8643
493.5588

sq(y-ybar)
0.765625
102.5156
15.01563
0.015625
15.01563
118.2656
83.26563
78.76563
4.515625
1.265625
4.515625
15.01563
17.01563
1.265625
37.51563
15.01563
509.75

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.944691
R Square
0.892441
Adjusted R Square
0.884759
Standard Error
1.978962
Observations
16
ANOVA
df
Regression
Residual
Total

SS
MS
F
Significance F
1 454.922 454.922 116.1615 3.67E-08
14 54.82805 3.916289
15
509.75

Coefficients
Standard Error t Stat
P-value Lower 95% Upper 95%Lower 95.0%
Upper 95.0%
Intercept
-3.24723 2.564656 -1.26614 0.226124 -8.74787 2.253415 -8.74787 2.253415
Annual_DividendRate
11.16715 1.036123 10.77782 3.67E-08 8.944891 13.38942 8.944891 13.38942

RESIDUAL OUTPUT
Observation
Predicted Stock_Price
Residuals
1 23.10726 -0.10726
2 31.5943 2.405705
3 24.44732 -4.44732
4 23.10726 0.892742
5 18.19371 1.80629
6 14.62022 -1.62022
7 31.14761 1.852391
8 13.72685 1.273152
9 27.12743 -1.12743
10 25.34069 -0.34069
11 28.02081 -2.02081
12 18.19371 1.80629
13 29.36086 -1.36086
14 25.78738 -0.78738
15 27.57412 2.42588
16 20.65048 -0.65048

a
b

R square

Upper 95.0%

0.892441

-3.24723
11.16715

Stock_Price
Annual_DividendRate
$23
2.36
$34
3.12
$20
2.48
$24
2.36
$20
1.92
$13
1.60
$33
3.08
$15
1.52
$26
2.72
$25
2.56
$26
2.80
$20
1.92
$28
2.92
$25
2.60
$30
2.76
$20
2.14
$24

y cap
y-ycap
y-ybar
23.10724
$0
-$1
31.59428
$2
$10
24.4473
-$4
-$4
23.10724
$1
$0
18.1937
$2
-$4
14.62021
-$2
-$11
31.14759
$2
$9
13.72684
$1
-$9
27.12742
-$1
$2
25.34067
$0
$1
28.02079
-$2
$2
18.1937
$2
-$4
29.36085
-$1
$4
25.78736
-$1
$1
27.5741
$2
$6
20.65047
-$1
-$4

sq(y-ycap)
0.011501
5.787498
19.7785
0.797013
3.262727
2.62508
3.431415
1.620941
1.271071
0.116059
4.083592
3.262727
1.851907
0.619936
5.884971
0.423113
54.82805

sq(y-ybar)
0.765625
102.5156
15.01563
0.015625
15.01563
118.2656
83.26563
78.76563
4.515625
1.265625
4.515625
15.01563
17.01563
1.265625
37.51563
15.01563
509.75

Electric Utility Stock Prices and Potentially Relevant Data

Stock_Price
$23
$34
$20
$24
$20
$13
$33
$15
$26
$25
$26
$20
$28
$25
$30
$20
$24

Return_AverageEquity
13.7
12.8
6.9
12.7
15.3
13.3
14.6
15.8
12.0
15.3
15.2
13.7
15.4
15.2
17.3
13.9
X1 bar
13.9
N

Annual_DividendRate
2.36
3.12
2.48
2.36
1.92
1.60
3.08
1.52
2.72
2.56
2.80
1.92
2.92
2.60
2.76
2.14
X2 bar
2.43
16

R*S
A*S
$315.10
$54.28
$435.20 $106.08
$138.00
$49.60
$304.80
$56.64
$306.00
$38.40
$172.90
$20.80
$481.80 $101.64
$237.00
$22.80
$312.00
$70.72
$382.50
$64.00
$395.20
$72.80
$274.00
$38.40
$431.20
$81.76
$380.00
$65.00
$519.00
$82.80
$278.00
$42.80
$5,362.70 $968.52
X1 bar sq X2bar sq
194.4282 5.898827

R sq
A sq
187.69
5.5696
163.84
9.7344
47.61
6.1504
161.29
5.5696
234.09
3.6864
176.89
2.56
213.16
9.4864
249.64
2.3104
144
7.3984 b1
234.09
6.5536 a
231.04
7.84 b2
187.69
3.6864
237.16
8.5264
231.04
6.76
299.29
7.6176
193.21
4.5796
3191.73 98.0292

y cap(return_avg)

0.447426
$17.64
11.16715

-$3.25