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Use the following estimated equation: ln( salary ) = 4.503 + 0.163ln( sales ) +0.109ln( mktval ) + 0.012 ceoten Std.errors (0.257) (0.039) (0.049)...
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?
