# I Regression: which parameters to use and how to plot the data

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1. May 17, 2016

### ducmod

Hello!
I am yet very weak in statistics, but I am learning some basic finance, and this requires to create regression.
Please, take a look at attached files - one excel that contains the results of regression and one screen shot of the window of StatPlus that I have to fill in. Before using my own data I would like to replicate the analysis presented in the file. I don't understand which columns are used to perform a regression model. There is part of data that computes variables for regression model, and it contains 4 columns. The goal is to find predicted dividends. So I assume that dividends per share is the dependent variable. But I still don't understand which columns I should use and how.
I will be very grateful for your help!
Thank you very much!
Edit: corrected the excel file, and added my results.

#### Attached Files:

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• ###### regression_model_test.xlsx
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Last edited: May 17, 2016
2. May 17, 2016

### RUber

Hi Ducmod,
In your attached Excel sheet, the columns used for the regression are clearly marked. Columns G-J are titled "Data for Regression Model".

The model was described by:
$D_t = a + bD_{t-1}+cEPS_t+d(\Delta EPS)$
You are correct that the Dividend, $D_t$ is your dependent variable, and you have 3 independent variables for this model, $D_{t-1}$ is called the "lagged DPS", $EPS_t$ is the "annual EPS", and $\Delta EPS$ is the "change in EPS".

The coefficients for the model, a, b, c, and d, are listed in that order in your output table.