Table 3-6 gives data on X (net profits after tax in U.S. manufacturing industries [$, in millions]) and Y (cash dividend paid quarterly in manufacturing industries [$, in millions]) for years 1974 to 1986.
CASH DIVIDEND (V) AND AFTER-TAX PROFITS (X)
IN U.S. MANUFACTURING INDUSTRIES, 1974-1986
a. What relationship, if any, do you expect between cash dividend and after-tax profits?
b. Plot the scatter gram between Y and X.
c. Does the scatter gram support your expectations in part (a)?
d. If so, do an OLS regression of Y on X and obtain the usual statistics.
e. Establish a 99% confidence interval for the true slope and test the hypothesis that the true slope coefficient is zero; that is, there is no relationship between dividend and the