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One of the theories regarding initial public offering (IPO) pricing is that the initial return y (the percentage change from offer to open price) on

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One of the theories regarding initial public offering (IPO) pricing is that the initial return y (the percentage change from offer to open price) on an IPO depends on the price revision x (the percentage change from pre-offer to offer price). Another factor that may influence the initial return is a high-tech dummy variable that equals 1 for high-tech firms and 0 otherwise. The following table shows a portion of the data on 264 IPO firms from January 2001 through September 2004. Initial Price Return Revision High-Tech 33.93 7.14 0 18 . 68 -26.39 . O 0. 08 -29 . 41 SOURCE: http://www.ipohome.com; http://www.nasdaq.com. Click here for the Excel Data File a-1. Estimate y = So + 81x + 82d + # where the dummy variable d equals 1 for firms that are high-tech. (Round your answers to 2 decimal places.) Initial Return 8.42 + 0.22 Price Revision + 3.68 High-Tech a-2. Use the estimated model to predict the initial return of a high-tech firm with a 10% price revision. (Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places.) Predicted return of a high-tech firm a-3. Find the corresponding predicted return of a firm that is not high-tech. (Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places.) Predicted return of a non high-tech firmb-1. Estimate y = Bo + 81x + Bad + where the dummy variable d equals 1 for firms that are not high-tech. (Negative values should be indicated by a minus sign. Round answers to 2 decimal place.) Initial Return Price Revision + High-Tech b-2. Use the estimated model to predict the initial return of a high-tech firm with a 10% price revision. (Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places.) Predicted the initial return of a high-tech firm b-3. Find the corresponding predicted return of a firm that is not high-tech. (Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places.) Predicted return of a non high-tech firm

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