Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

One of the theories regarding initial public offering (IPO) pricing is that the initial return (Initial) on an IPO depends on the price revision

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

One of the theories regarding initial public offering (IPO) pricing is that the initial return (Initial) on an IPO depends on the price revision (Revision). Another factor that may influence the intial return is whether or not the firm is high-tech. The following table shows portion of the diets on 254 IPO firms. 33.93 Revision 7.14 Highted 18.6 -26.39 NO 0.08 29.41 Yes Palcture Click here for the Excel Data File Hint: You have to first convert the high-tech categorical variable (Yes/No) Into a dummy variable (1/0) -1 Estimate Initial evision where the dummy variable d'equals 1 for firms that are high-tech and 0 otherwise. (Negative values should be indicated by a minus sign Round your answers to 4 decimal places) Intare Revision -2. Use the estimated model to predict the intial 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 inalt of a high tech fem 3. Find the corresponding predicted return of a firm shat is not highter Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places Prestided ital return of a non high-tech m b-1. Estimate int where the cummy verable or equals 1 for foms that are not high-tech and 0 otherwise. INegative values should be indicated by a minus sign Round your answers to 4 decimal places) b-2. Use the estimates model to predict intel return of a gh-tech firm with a 10fs price revision (Round coefficient estimates to at least 4 decimal pisces and final answer to 2 decimal places Predited Indal tam if high-t b-3. Pind the corresponding predicted return of a firm that a not high-tech Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places Pradictulina um of a non nightm

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems

Authors: Vernon Richardson, Chengyee Chang

1st edition

78025494, 978-0078025495

More Books

Students also viewed these Accounting questions

Question

=+ What is Pats minimax choice?

Answered: 1 week ago

Question

The domain of the variable in the expression x 3/x + 4 is________.

Answered: 1 week ago

Question

What is the essence ofthe discounted cash flow method?

Answered: 1 week ago

Question

Describe the benefits and costs of decentralization

Answered: 1 week ago