My Investment Record Indicates the Following Sample of IPO's What Is the Average Underpricing of This Sample of IPO's

question 127

Short Answer

My investment record indicates the following sample of IPO's
$$\begin{array} { | c | c | } \hline \text { IPO } & \text { Initial Return } \\\hline \mathrm { A } & 8 \% \\\hline \mathrm { B } & 16 \\\hline\end{array}$$ What is the average underpricing of this sample of IPO's?

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Definitions:

Contribution Format

A format for income statements where all variable expenses are subtracted from sales to calculate contribution margin, which then has fixed expenses subtracted to determine net operating income.

Income Statement

A financial report that shows a company's financial performance over a specific period, including revenues, expenses, and profit or loss.

Contribution Margin Ratio

The percentage of sales revenue that exceeds variable costs, indicating how much of each sales dollar is available to cover fixed costs and generate profit.

Tile Manufacturer

A company that specializes in producing tiles for floors, walls, and other surfaces.