Answer the questions of this problem, using the following estimated equation: ln( salary ) = 4.503 + 0.163ln( sales ) +0.109ln( mktval ) + 0.012…

R-squared=0.3182

Need Help Writing an Essay?

Tell us about your assignment and we will find the best writer for your paper.

Write My Essay For Me

Where the variables are described as follows:

salary= CEO compensation, in $1000

sales= firm sales, in $millions

mktval= the market value of the firm , in $millions

ceoten= the number of years as CEO with the company

a. What is the impact on CEO salary, of a 50% increase in the firm’s market value?

b. What is wrong with the statement: “A 10% increase in sales revenue is associated with about a 16.3% increase in salary”?

c. Interpret the coefficient of the variable ceoten.

d. With a 5% significance level, test the hypothesis that a longer tenure ha a positive effect on the CEO salary.

e. A company in out sample currently has a market value of $23,200 millions, a total revenue from sales evaluated at $6,200 millions, and a CEO who has been with the firm for 2 years already. Calculate the estimated ln(salary) of this company’s CEO.

f. With a 5% significance, are the variables sales, market value, and CEO tenure, jointly significant predictors of CEO salary?