Calculate Tobin's q for a firm.You have the following information: MPK = 2%,R = 3%,the stock market value is $1,368,the capital stock is 15 units,and the price of stock is $100.What is Tobin's q? Given your answer,the market believes the firm should __________.
A) 1.5;invest in capital.
B) 0.7;invest in capital.
C) 1.1;disinvest in capital.
D) 0.9;disinvest in capital.
E) 0.8;hold capital constant.
Correct Answer:
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