_________ is the market value of all a firm's outstanding equity and debt securities divided by the replacement cost of all the firm's assets.

Question

Quizplus · Accepted Answer

Tobin's q ratio is a measure of the market value of a company relative to the replacement cost of its assets. It is calculated as the market value of a firm's outstanding equity and debt securities divided by the replacement cost of all the firm's assets. A higher q ratio indicates that investors have faith in the company's ability to generate profits with its assets, while a lower q ratio may indicate that the company needs to invest in more productive assets or make changes to its operations to increase profitability.

_________ Is the Market Value of All a Firm's Outstanding