If the market value of a firm is $6 billion and the replacement cost of installed capital is equal to $3 billion,then Tobin's q is equal to ________.
A)9
B)3
C)18
D)2

Name: If the market value of a firm is $6 billion and the replacement cost of installed capital is equal to $3 billion,then Tobin's q is equal to ________. A)9 B)3 C)18 D)2
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Question

Quizplus · Accepted Answer

Tobin's q is calculated as the market value of a firm divided by the replacement cost of its installed capital. Therefore, Tobin's q = $6 billion / $3 billion = 2.

If the Market Value of a Firm Is $6 Billion