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IPO Underpricing Estimation in Australian and US Market

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Added on  2021-05-27

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Evaluating the initial returns generated from Australian, while analysing and interpreting the data: Initial public listing (Descriptive Analysis): Initial return Mean 9.42% Standard Error 4.94% Median 5.78% Mode 0.00% Minimum Standard Deviation 26.15% Sample Variance 6.84% Kurtosis 607.69% Median Skewness 144.62% Range 154.84% Minimum -55.14% Maximum 99.70% Sum 263.86% Count 28.00 The calculation conducted in the about descriptive statistics relatively helps in identifying the returns that is

IPO Underpricing Estimation in Australian and US Market

   Added on 2021-05-27

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Running head: FINANCEFinanceName of the Student:Name of the University:Authors Note:
IPO Underpricing Estimation in Australian and US Market_1
FINANCE1Table of ContentsQuestion:....................................................................................................................................21. Evaluating the initial returns generated from Australian, while analysing and interpretingthe data:......................................................................................................................................22. Identifying the Holding Period Return on Calculating and comparing the percentage returnon the long run IPO performance:............................................................................................113. Estimating the occurrence of IPO underpricing, which is been conducted in Australian andUS market by evaluating the empirical research on Hong Kong:............................................12Reference and Bibliography:....................................................................................................15
IPO Underpricing Estimation in Australian and US Market_2
FINANCE2Question:1. Evaluating the initial returns generated from Australian, while analysing andinterpreting the data:Initial public listing (Descriptive Analysis):Initial returnMean9.42%Standard Error4.94%Median5.78%Mode0.00%Standard Deviation26.15%Sample Variance6.84%Kurtosis607.69%Skewness144.62%Range154.84%Minimum-55.14%Maximum99.70%Sum263.86%Count 28.00 The calculation conducted in the about descriptive statistics relatively helps inidentifying the returns that is generated from the IPOs data listed in Australia from April toJuly 2015. the descriptive statistics mainly contains the overall calculations of standarddeviation, mean, mode and median which helps in deriving the results obtained from the IPOinitiation. From the valuation it could be understood that 28 of the IPOs were used to drivethe calculations and detect whether on the day of initial price offering adequate return forprovided to investors. After evaluating the descriptive analysis it could be identified that theaverage or mean returns provided by the stocks on the day of their initiation was at the levelsof 9.4%. This actually indicates that maximum of the IPO provided a positive return to theinvestors on the first day of trading. Moreover, the median or the mid value effect on that was
IPO Underpricing Estimation in Australian and US Market_3
FINANCE3generated by the IP used during April to July 2015 was at the levels of 5.78%. This indicatesthat 50% of the company's launching the IPO during the period had more than 5.78% returns.From the overall valuation it could be identified that risk levels of the IPO was at the levels of26.2%, which relatively indicates high risk involved in Investments. Therefore, from thevaluation it could be understood that risk involvement in the IPOs is relatively higher than thereturns provided by the company (Bradley, Kim and Krigman 2015).1STADHAERAFGALIAXPAYSBMHCGCECXFFTFRXGDFGNXGTYIQ3KSLMDCMUAMYONCLPIQPPLQMSRFNSHMSLCWDE-80.0%-60.0%-40.0%-20.0%0.0%20.0%40.0%60.0%80.0%100.0%120.0%Return %After the evaluation of above figure the overall returns provided by the companiesduring the initial public offering can be identified. From the valuation it could be detectedthat maximum of the companies that have issued the IPO has incurred first day losses.Fromthe evaluation it could also be identified that returns provided by the IPL companies areinconsistent, as devaluation of the stock was based on the assumptions made by the investorsregarding the financial strength and return generation capacity of the companies. hence itcould be identified that some of the companies generated a higher returns while otherprovided losses during the IPO initiation (Bouzouita, Gajewski and Gresse 2015).There are some assumptions made before the evaluation of descriptive analysis underGICS sector, which relatively helps in evaluating the sectors that has more than one companyin their IPO initiation.Sector that does not have more than one company in there it initiationis not selected for the descriptive analysis, as the outcome will not be relevant and will
IPO Underpricing Estimation in Australian and US Market_4

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