Tobin's Q Is

question 33

Multiple Choice

Tobin's q is

• A)the ratio of a firm's market value on the stock and bond markets to the replacement cost of its capital stock.
• B)the ratio of a firm's gross investment to its capital stock less its replacement cost of capital.
• C)a firm's replacement cost of capital less its value on the stock and bond markets.
• D)the ratio of a firm's replacement cost of capital to its gross investment.

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Definitions:

Yield To Maturity

The total return anticipated on a bond if it is held until the date of its maturity, including all interest and principal repayments.

Semi-Annually

Occurring or calculated twice a year, often used in the context of interest payments or other financial assessments.

Face Value

The nominal or stated value of a bond, share of stock, or other financial instruments, typically used as a reference for calculating interest, dividends, or premiums.

Coupon Bond

A debt security that pays the holder a fixed interest rate (coupon) over the bond's life, with the principal amount repaid at maturity.