If the Market Value of a Firm Is $6 Billion

question 13

Multiple Choice

If the market value of a firm is $6 billion and Tobin's q is equal to 2,then the replacement cost of installed capital must be ________.

• A)$2 billion
• B)$3 billion
• C)$9 billion
• D)$18 billion

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Definitions:

English Common Law

A legal system originated in England, characterized by the development of law through judicial decisions and precedents, forming the basis of the legal system in England and many countries that were once British colonies.

Sugar

A sweet-tasting, soluble carbohydrate found in many plants, extensively used as a sweetener in food and beverages.

Slave Trade

The buying, transporting, and selling of human beings as slaves, specifically the transatlantic slave trade which forcibly brought Africans to the Americas from the 16th to the 19th centuries.

West Indies

A region in the Caribbean Sea consisting of numerous islands that were crucial during the colonial period for their agricultural production, especially sugar.