| Summary: | The underpricing of IPO is one of the most popular topics of researches in the financial markets these days. A large number of theoretical and empirical studies have been carried out to investigate the determinants of IPO underpricing.
By using a sample of 691 IPOs in the UK market from 1990 to 2015, this study finds out that the average underpricing level during this sample period is 18.28% while the weighted average initial return is 4.68%. Additionally, interest coverage ratio, accounts receivable days and MKT15 are found to be significantly have positive relationship with the degree of underpricing while gross income, offering price, offering size, time interval, the age of firms and total assets are negatively related to underpricing in a significant way.
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