The Effect of DER, EPS, and Underwriter Reputation on Initial Return with Interest Rate

Abstract

This study aims to analyze the effect of EPS, DER, and underwriter reputation on initial returns, which is moderated by the interest rate on IPO issuers. Statistical data analysis is logit regression analysis. The results showed that EPS, DER, and underwriter reputation, which were moderated by the interest rates, significantly influenced the initial return. The testing of each variable's hypothesis showed that DER and underwriter reputation influenced the initial return significantly. On the contrary, EPS and interest rates affected initial returns significantly. The DER and underwriter reputation, which are moderated by the interest rate (SB) indicated that the DER* SB and the reputation of the underwriter* SB had no significant effect on the initial return. As for the variable EPS* SB indicated that it had a significant effect on the initial return. This means that the EPS affected the initial return with the interest rate strengthening the relationship between EPS and initial return.