A Firm Has Total Assets with a Current Book Value

question 4

Multiple Choice

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

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Definitions:

Real Assets

Physical assets such as real estate, commodities, and natural resources that have intrinsic value.

Plant and Equipment

Tangible long-term assets owned by a business, used in the production or supply of goods and services, such as machinery and buildings.

Limited Liability

A legal structure that limits the financial liability of the owners to the amount of money they invested in the company.

Corporate Form

A legal structure for a business recognized by law as a separate legal entity from its owners, with its own rights and liabilities distinct from those of its owners.