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 Return 40.44 4.83 Price Revision 8.39 -33.53 High-Tech 0 2.22 -19.05 1 picture Click here for the Excel Data File a-1. Estimate y = 8. + 81x + 820 + E where the dummy variable d equals 1 for firms that are high-tech. (Round your answers to 2 decimal places.) Initial Return Price Revision + 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 firm b-1. Estimate y = 8 + 81x + 820 + where the dummy variable d equals 1 for firms that are not high-tech. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal place.) Initial Return 6.80 + 0.11 Price Revision + 3.76 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 11.69 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 7.93 C-1. In the high-tech models, determine if the dummy variable is significant at the 5% level. The dummy variable is significant since the p-value is less than 0.05. The dummy variable is not significant since the p-value is more than 0.05. The dummy variable is significant since the p-value is more than 0.05. The dummy variable is not significant since the p-value is less than 0.05. c-2. In the not high-tech models, determine if the dummy variable is significant at the 5% level. The dummy variable is significant since the p-value is less than 0.05. The dummy variable is not significant since the p-value is more than 0.05. The dummy variable is significant since the p-value is more than 0.05. The dummy variable is not significant since the p-value is less than 0.05. -6.05 Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech 40.44 8.39 0 -2.98 8.72 0 -7.42 -23.65 1 -1.33 -5.07 1 -3.01 -43.5 1 27.69 -5.01 0 4.5 -20.37 0 6.46 -9.83 0 4.83 0 -33.53 0 53.9 22.1 0 13.7 -0.57 1 0 0 0 0 5.05 -43.04 1 4.22 -1.63 1 1 0 o -35.59 1 1 18.48 15.18 0 -8.38 -13.53 0 55.55 -0.28 0 -12.99 - 15.61 1 0 -21.06 0 0 1 8.99 3.24 1 25.2 12.66 1 1 0 -20.33 0 12.02 -42.41 1 -2.14 11.54 1 0 0 -3.77 0 0.35 -21.89 1 9.92 -47.56 1 -10.32 0 0 5.97 -7.75 0 23.51 7.11 0 0 -5.04 0 0 - 14.99 0 4.78 -19.22 1 37.27 28.54 1 23.84 1.2 0 -2.9 -12.13 1 20.82 0 0 2.22 -19.05 1 5.99 0 1 1 12.12 -17.39 1 17.31 -5.22 0 0 -29.84 0 -5.87 -2.99 1 0.81 -23.67 1 12.38 0 0 20.08 0 1 15.11 -23.82 0 33.04 27.23 1 34.54 15.36 1 11.97 -32.05 1 10.55 0 0 11.02 -17.63 1 1 0 -31.55 0 5.52 0.01 0 4.93 -37.54 1 8.75 28.21 0 0 -1.78 -4.52 0 28.05 -6.6 1 1.81 -21.37 0 0 -13.84 0 0 0 0 44.52 9.37 0 32.34 18.4 1 7.99 0 0 -2.6 -5.34 0 1.04 16.83 1 1 0 -3.53 0 11.8 -3.93 1 -2.94 -60.84 0 -9.6 -16.86 0 10.06 7.13 0 43.32 0 0 0 -23.82 0 -19 -6.3 0 20.62 2.98 0 4.46 -19.3 0 59.95 16.01 1 0.84 -10.35 0 4.85 -28.85 0 0 -16.16 0 0 8.86 10.67 0 27.98 25.81 1 -10.92 0 0 20.72 29.64 0 5.2 8.9 1 1 7.04 -27.88 0 - 19.06 -28.36 1 1 -1.99 3.72 0 0 -21.29 1 0 -27.75 0 -2.6 1.92 0 17.06 16.96 0 7.57 6.71 0 15.85 21.46 1 1 15.93 9.05 1 -3.97 -28.87 0 0 3.16 -17.04 0 0 3.59 0 19.65 -8.09 1 -7.12 0 0 -4.45 -6.18 0 -6.46 -28.13 1 -11.66 -12.9 1 0 -32.24 1 -9.85 0 0 0 -26.01 1 18.44 0 0 -2.17 -27.6 1 26.37 -35.33 1 1 21.26 -13.22 1 5.29 4.03 0 0 -11.55 1 7.9 -17.42 1 1.99 -2.43 0 0 0 0 0 0 0 -1.42 -0.26 1 0 0 4.15 0 0 -3.71 33.87 0 47.81 4.36 0 0 15.92 34.15 0 13.87 9.46 0 9.2 -33.93 0 0 11.16 -57.94 1 7.44 -12.78 0 19.75 34.12 1 0 - 19.16 0 0 8.62 0 0 2.98 -45.32 1 -6.15 -34.21 0 2 - 14.02 0 0 0 0 -18.87 0 34.72 13.17 0 0 2.27 -23.65 1 11.79 3.87 0 -1.85 0 0 10.24 20.05 0 0 11.39 12.51 1 5.69 -9.05 1 17.83 0 0 5.85 -24.37 1 -0.65 9.03 0 0 -4.29 117.63 0 27.61 0 0 0 -35.74 - 10.25 0 28.14 21.22 0 35.52 39.01 1 0.55 -16.86 1 0 0 0 0 12.5 0 9.56 -1.14 1 -9.3 9.23 0 9.47 19.52 0 0 -11.69 1 1 0 1.35 0 -0.67 -1.11 1 -1.37 -11.58 0 -4.57 4.6 1 1 26.45 49.73 1 3.6 -8.27 1 18.74 -13.52 0 43.11 -55.1 1 29.4 -29.02 1 11.56 -17.35 1 18.79 -38.95 1 10.68 -4.58 0 21.42 -39.93 1 -20.55 0 0 9.26 11.18 1 -2.34 -29.53 1 1 -5.95 0.48 1 1 16.77 0 0 0 -1.89 -2.51 1 1 0 -0.14 0 10.32 10.14 0 0 0 0 -17.89 0 25.99 8.88 1 0 0 -15.44 0 0 2.59 0 5.86 -44.35 1 -0.75 -5.05 0 -11.05 -16.72 0 0 -3.95 1.23 0 -3.62 -18.31 1 -6.74 11.9 0 9 -5.85 0 0 3.56 -17.13 1 9.45 10.61 0 15.03 3.78 0 23.27 5.47 0 6.12 -48.38 0 -4.95 -20.16 0 14.42 -36.6 0 0 0 0 -30.3 0 22.61 44.77 1 -0.81 -23.51 1 -1.49 20.26 0 7.06 -36.56 0 24.54 6.73 1 23.06 26.55 0 8.31 17.49 0 0.67 -31.97 1 -2.54 1.73 0 -7.76 -4.03 1 3.56 -6.18 1 -22.49 -3.95 1 1 14.48 -3.45 0 0 16.1 0 0 1 22.32 -8.22 0 11.32 -25.86 1 - 10.1 -0.88 0 -2.82 -11.67 1 0 -1.38 0 0 0 -2.5 0 7.03 0 0 0 8.78 0 0 0 -4.7 -4.47 1 -1.26 -23.01 0 13.31 -20.73 0 32.77 25.29 1 -2.58 4.77 0 11.67 -1.23 1 25.87 -0.64 0 -14.07 - 10.1 0 6.47 -7.13 0 13.18 -30.99 0 0 10.28 0 23.64 -4.18 1 20.3 -21.9 0 7.94 -12.51 1 40.16 -3.99 0 -2.53 -4.23 1 3 3 -8.59 0 20.13 16.58 0 17.46 18.25 0 2.01 -6.37 0 15.72 -21.5 0 -1.29 5.71 0 -7.35 -51.01 1 0 17.17 0 -0.76 -83.16 0 -8.68 -21.64 0 0 3.58 -22.82 1 1 -10.39 0 0 -0.08 6.3 0 10.82 0 0 -3.68 14.15 0 0 32.88 -19.31 0 0 0 -47.07 0 -0.84 0 0 0 21.39 18.79 1 4.68 2.74 0 20.41 1.04 0 23.45 -0.72 0 0 0 -3.87 1 9.93 -51.55 1 17.53 0 1 0 0 -24.89 0 13.04 -2.06 1 0 0 -35.19 0 0 3.61 0 0 3.12 2.25 0 15.25 -37.82 1 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 Return 40.44 4.83 Price Revision 8.39 -33.53 High-Tech 0 2.22 -19.05 1 picture Click here for the Excel Data File a-1. Estimate y = 8. + 81x + 820 + E where the dummy variable d equals 1 for firms that are high-tech. (Round your answers to 2 decimal places.) Initial Return Price Revision + 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 firm b-1. Estimate y = 8 + 81x + 820 + where the dummy variable d equals 1 for firms that are not high-tech. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal place.) Initial Return 6.80 + 0.11 Price Revision + 3.76 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 11.69 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 7.93 C-1. In the high-tech models, determine if the dummy variable is significant at the 5% level. The dummy variable is significant since the p-value is less than 0.05. The dummy variable is not significant since the p-value is more than 0.05. The dummy variable is significant since the p-value is more than 0.05. The dummy variable is not significant since the p-value is less than 0.05. c-2. In the not high-tech models, determine if the dummy variable is significant at the 5% level. The dummy variable is significant since the p-value is less than 0.05. The dummy variable is not significant since the p-value is more than 0.05. The dummy variable is significant since the p-value is more than 0.05. The dummy variable is not significant since the p-value is less than 0.05. -6.05 Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech Initial Return Price Revision High-tech 40.44 8.39 0 -2.98 8.72 0 -7.42 -23.65 1 -1.33 -5.07 1 -3.01 -43.5 1 27.69 -5.01 0 4.5 -20.37 0 6.46 -9.83 0 4.83 0 -33.53 0 53.9 22.1 0 13.7 -0.57 1 0 0 0 0 5.05 -43.04 1 4.22 -1.63 1 1 0 o -35.59 1 1 18.48 15.18 0 -8.38 -13.53 0 55.55 -0.28 0 -12.99 - 15.61 1 0 -21.06 0 0 1 8.99 3.24 1 25.2 12.66 1 1 0 -20.33 0 12.02 -42.41 1 -2.14 11.54 1 0 0 -3.77 0 0.35 -21.89 1 9.92 -47.56 1 -10.32 0 0 5.97 -7.75 0 23.51 7.11 0 0 -5.04 0 0 - 14.99 0 4.78 -19.22 1 37.27 28.54 1 23.84 1.2 0 -2.9 -12.13 1 20.82 0 0 2.22 -19.05 1 5.99 0 1 1 12.12 -17.39 1 17.31 -5.22 0 0 -29.84 0 -5.87 -2.99 1 0.81 -23.67 1 12.38 0 0 20.08 0 1 15.11 -23.82 0 33.04 27.23 1 34.54 15.36 1 11.97 -32.05 1 10.55 0 0 11.02 -17.63 1 1 0 -31.55 0 5.52 0.01 0 4.93 -37.54 1 8.75 28.21 0 0 -1.78 -4.52 0 28.05 -6.6 1 1.81 -21.37 0 0 -13.84 0 0 0 0 44.52 9.37 0 32.34 18.4 1 7.99 0 0 -2.6 -5.34 0 1.04 16.83 1 1 0 -3.53 0 11.8 -3.93 1 -2.94 -60.84 0 -9.6 -16.86 0 10.06 7.13 0 43.32 0 0 0 -23.82 0 -19 -6.3 0 20.62 2.98 0 4.46 -19.3 0 59.95 16.01 1 0.84 -10.35 0 4.85 -28.85 0 0 -16.16 0 0 8.86 10.67 0 27.98 25.81 1 -10.92 0 0 20.72 29.64 0 5.2 8.9 1 1 7.04 -27.88 0 - 19.06 -28.36 1 1 -1.99 3.72 0 0 -21.29 1 0 -27.75 0 -2.6 1.92 0 17.06 16.96 0 7.57 6.71 0 15.85 21.46 1 1 15.93 9.05 1 -3.97 -28.87 0 0 3.16 -17.04 0 0 3.59 0 19.65 -8.09 1 -7.12 0 0 -4.45 -6.18 0 -6.46 -28.13 1 -11.66 -12.9 1 0 -32.24 1 -9.85 0 0 0 -26.01 1 18.44 0 0 -2.17 -27.6 1 26.37 -35.33 1 1 21.26 -13.22 1 5.29 4.03 0 0 -11.55 1 7.9 -17.42 1 1.99 -2.43 0 0 0 0 0 0 0 -1.42 -0.26 1 0 0 4.15 0 0 -3.71 33.87 0 47.81 4.36 0 0 15.92 34.15 0 13.87 9.46 0 9.2 -33.93 0 0 11.16 -57.94 1 7.44 -12.78 0 19.75 34.12 1 0 - 19.16 0 0 8.62 0 0 2.98 -45.32 1 -6.15 -34.21 0 2 - 14.02 0 0 0 0 -18.87 0 34.72 13.17 0 0 2.27 -23.65 1 11.79 3.87 0 -1.85 0 0 10.24 20.05 0 0 11.39 12.51 1 5.69 -9.05 1 17.83 0 0 5.85 -24.37 1 -0.65 9.03 0 0 -4.29 117.63 0 27.61 0 0 0 -35.74 - 10.25 0 28.14 21.22 0 35.52 39.01 1 0.55 -16.86 1 0 0 0 0 12.5 0 9.56 -1.14 1 -9.3 9.23 0 9.47 19.52 0 0 -11.69 1 1 0 1.35 0 -0.67 -1.11 1 -1.37 -11.58 0 -4.57 4.6 1 1 26.45 49.73 1 3.6 -8.27 1 18.74 -13.52 0 43.11 -55.1 1 29.4 -29.02 1 11.56 -17.35 1 18.79 -38.95 1 10.68 -4.58 0 21.42 -39.93 1 -20.55 0 0 9.26 11.18 1 -2.34 -29.53 1 1 -5.95 0.48 1 1 16.77 0 0 0 -1.89 -2.51 1 1 0 -0.14 0 10.32 10.14 0 0 0 0 -17.89 0 25.99 8.88 1 0 0 -15.44 0 0 2.59 0 5.86 -44.35 1 -0.75 -5.05 0 -11.05 -16.72 0 0 -3.95 1.23 0 -3.62 -18.31 1 -6.74 11.9 0 9 -5.85 0 0 3.56 -17.13 1 9.45 10.61 0 15.03 3.78 0 23.27 5.47 0 6.12 -48.38 0 -4.95 -20.16 0 14.42 -36.6 0 0 0 0 -30.3 0 22.61 44.77 1 -0.81 -23.51 1 -1.49 20.26 0 7.06 -36.56 0 24.54 6.73 1 23.06 26.55 0 8.31 17.49 0 0.67 -31.97 1 -2.54 1.73 0 -7.76 -4.03 1 3.56 -6.18 1 -22.49 -3.95 1 1 14.48 -3.45 0 0 16.1 0 0 1 22.32 -8.22 0 11.32 -25.86 1 - 10.1 -0.88 0 -2.82 -11.67 1 0 -1.38 0 0 0 -2.5 0 7.03 0 0 0 8.78 0 0 0 -4.7 -4.47 1 -1.26 -23.01 0 13.31 -20.73 0 32.77 25.29 1 -2.58 4.77 0 11.67 -1.23 1 25.87 -0.64 0 -14.07 - 10.1 0 6.47 -7.13 0 13.18 -30.99 0 0 10.28 0 23.64 -4.18 1 20.3 -21.9 0 7.94 -12.51 1 40.16 -3.99 0 -2.53 -4.23 1 3 3 -8.59 0 20.13 16.58 0 17.46 18.25 0 2.01 -6.37 0 15.72 -21.5 0 -1.29 5.71 0 -7.35 -51.01 1 0 17.17 0 -0.76 -83.16 0 -8.68 -21.64 0 0 3.58 -22.82 1 1 -10.39 0 0 -0.08 6.3 0 10.82 0 0 -3.68 14.15 0 0 32.88 -19.31 0 0 0 -47.07 0 -0.84 0 0 0 21.39 18.79 1 4.68 2.74 0 20.41 1.04 0 23.45 -0.72 0 0 0 -3.87 1 9.93 -51.55 1 17.53 0 1 0 0 -24.89 0 13.04 -2.06 1 0 0 -35.19 0 0 3.61 0 0 3.12 2.25 0 15.25 -37.82 1
