Please HELP...WHAT SHOULD MY EQUATION BE?

Question

okay here goes. im running a multiple regression model. i know my dependant variable and my independant variables but dont know the formula to use. its not as straightforawrd as it sounds so please read the question fully.

my dependant variable is firm performance or FP

my independant variables are DP, DPR, SIZE, and LEV

heres the problem. DP represents the dividend paid, and takes the value 0 or 1, to represent whether a firm pays no dividend, or pays some dividend, respectivly. The DPR variable is how much the company pays, so when DP is 0 DPR wont be applicable. so how should my regression equation look?

plz plz plz help, im trying so hard, and i cant find the answer.

Answer 1

I don't see why you would need DP? Just using DPR, which could be zero if no dividend is paid, will do the trick.