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Tobin’s q

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Abstract

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.

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  1. http://link.springer.com/referencework/10.1057/978-1-349-95189-5

    Gary Smith

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  1. Gary Smith
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Smith, G. (2018). Tobin’s q. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2829

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