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PRACTICE PROBLEM Table X Relationship between underpricing and firm size. The dependent variable is the first-day return, defined as the closing price on the first
PRACTICE PROBLEM Table X Relationship between underpricing and firm size. The dependent variable is the first-day return, defined as the closing price on the first day of trading less the offer price, divided by the offer price. FSIZE is the natural log of the book value of the firm's assets. VC is a dummy variable that takes on a value of one if the firm was venture-backed, and zero otherwise. D93, D94, and D95 are dummy variables that take on a value of one if the firm went publice in 1993, 1994, and 1995, respectively, and zero otherwise. FSIZE93, FSIZE94, and FSIZE95 are interactive dummies, obtained by multiplying FSIZE with D93, D94, and D95, respectively. i-statistics are reported in parentheses. I ( Intercept FSIZE VC D93 D94 D95 FSIZE93 FSIZE94 FSIZE95 0316 -0.010 (2.46) 0.005 (0.37) -0.005 (0.29) -0.043 (2.81) 0.046 (2.66) (4.67) -0.010 1091 (2.41) 0.004 (0.36) -0.000 (0.43) -0.003 (3.03) 0.003 (2.51) Observations Adjusted R-squared 1. What is the intercept for firms that went public in 1996? 2. Wha
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