A firm is most likely to have a value of Tobin's q that exceeds 1 if
A) it is privately held
B) it consistently allows depreciation to erode its stock of physical capital
C) it holds numerous copyrights
D) its optimal capital stock exceeds its actual capital stock
E) its gross investment exceeds its net investment

Question

Quizplus · Accepted Answer

A firm with numerous copyrights likely has valuable intangible assets, which can increase the market value of the firm relative to the replacement cost of its assets, leading to a Tobin's q greater than 1.

A Firm Is Most Likely to Have a Value of Tobin's