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 (Revision).

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 initial return is whether or not the firm is high-tech. The following table shows a portion of the data on 264 IPO firms.

Initial Revision HighTech
33.93 7.14 No
18.68 26.39 No
0.08 29.41 Yes

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). a-1. Estimate Initial = o + 1Revision + 2d + , 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.)

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_2

Step: 3

blur-text-image_3

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

No Nonsense Management A General Managers Primer

Authors: Richard S. Sloma

1st Edition

1893122603, 978-1893122604

More Books

Students also viewed these General Management questions

Question

What processes are involved in perceiving?

Answered: 1 week ago