A firm has total assets with a current book value of $71,600, a current market value of $82,300, and a current replacement cost of $90,400. What is the value of Tobin's Q?
A) 0.85
B) 0.87
C) 0.90
D) 0.94
E) 0.91

Question

Quizplus · Accepted Answer

Tobin's Q is calculated as the market value of a firm's assets divided by the replacement cost of those assets. Therefore, Tobin's Q = $82,300 / $90,400 = 0.91.

A Firm Has Total Assets with a Current Book Value