| Summary: | This study aims to identify the determinants of IPO underpricing on Indonesian Stock
Exchange. The determinants are underwriter reputation, return on assets, selection of
depreciation methods of accounting, the percentage of shares retained by the old owner, auditor
reputation, listing time, and financial leverage.
This study used purposive sampling method by taking the 56 stocks that make an initial
public offering (IPO) from 9 September 2002 to October 30, 2007 as a sample. The sample
analyzed by multiple regression to determine variables that have a significant influence on
underpricing.
The results showed that underwriter reputation has a significant influence on
underpricing on the degree of confidence 5%, while return on assets and listing time has a
significant influence on the degree of confidence 10%. Then together all the independent
variables have an influence of 31.45% against the changes in underpricing.
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