Industrial organization economists and financial analysts often employ firm level Tobin's q , typically interpreted as the firm's market value divided by its book value. The measurements, applications, and interpretations vary considerably enough to warrant the questioning of its usefulness. This paper develops a conceptual framework for Tobin's q and, in doing so, offers some useful interpretations that hopefully clear up some of the past misunderstandings regarding this useful metric.
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Peter A. Zaleski (2024) studied this question.
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