Question: Jenson, Solberg, and Zorn investigated the relationship of insider ownership debt, and dividend policies in companies. One of their findings was that firms with high insider ownership choose levels of debt and dividends. Shown here is a sample of data of these three variables for 11 different industries. Use the data to develop the equation of the regression model to predict insider ownership by debt ratio and dividend payout.
|
Industry
|
Insider Ownership
|
Debt Ratio
|
Dividend Payout
|
|
Mining
|
8.2
|
14.2
|
10.4
|
|
Food & Beverage
|
18.4
|
20.8
|
14.3
|
|
Furniture
|
11.8
|
18.6
|
12.1
|
|
Publishing
|
28.0
|
18.5
|
11.8
|
|
Petroleum Refining
|
7.4
|
28.2
|
10.6
|
|
Glass & Cement
|
15.4
|
24.7
|
12.6
|
|
Motor Vehicle
|
15.7
|
15.6
|
12.6
|
|
Department Store
|
18.4
|
21.7
|
7.2
|
|
Restaurant
|
13.4
|
23.0
|
11.3
|
|
Amusement
|
18.1
|
46.7
|
4.1
|
|
Hospital
|
10.0
|
35.8
|
9.0
|