Tobin’s q is the ratio of the market value of a firm to the replacement cost of its assets, a statistic that depends on the firm’s profitability and financial markets’ required rate of return. Although there are a variety of measurement issues, including the distinction between marginal and average q, Tobin’s q can be used to predict investment spending or to control for a firm’s current and future profitability in empirical studies of corporate structure and behaviour.
Accounting conventions Adjustment costs Corporate finance Depreciation Heterogeneous capital Inflation Investment decisions Keynes, J. M Monopoly rents Rate of return Takeovers Technological progress Tobin, J Tobin’s q
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