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. To investigate whether accounting quality affects the firm value, the following regression considered: FirmValue, = a + B,AQt + B2FirmSize, + Ht

. To investigate whether accounting quality affects the firm value, the following regression considered: FirmValue, = a + B,AQt + B2FirmSize, + Ht

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter4: Equations Of Linear Functions
Section4.5: Correlation And Causation
Problem 2AGP
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4. To investigate whether accounting quality affects the firm value, the following regression is considered: FirmValue, = a + B,AQt + B2FirmSize, + Ht Required: (a). How would you modify the above model to be able to test the hypothesis that the firm value is higher after the adoption of the International Financial Reporting Standards (IFRS)? Explain the modified model, the expected results and the implication of the results. (b). How would you modify the above model to test the hypothesis that the average impact of the accounting quality on the firm value is higher after the adoption of IFRS? Explain the modified model, the expected results and the implication of the results.
Transcribed Image Text:4. To investigate whether accounting quality affects the firm value, the following regression is considered: FirmValue, = a + B,AQt + B2FirmSize, + Ht Required: (a). How would you modify the above model to be able to test the hypothesis that the firm value is higher after the adoption of the International Financial Reporting Standards (IFRS)? Explain the modified model, the expected results and the implication of the results. (b). How would you modify the above model to test the hypothesis that the average impact of the accounting quality on the firm value is higher after the adoption of IFRS? Explain the modified model, the expected results and the implication of the results.
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