The denominator of Tobin’s Q represents ______

4 The denominator of Tobin’s Q represents ________________________________

5 T or F: A growth stock guarantees a continuous dividend.

6 The reason some stocks do not pay dividends and others do is ____________________________.

Expert Solution

Q4) Replacement cost of assets

Explanation: Tobin Q = market value of equity / replacement cost of assets

Q5) False

Explanation: A growth stock will never guarantee a dividend because it would need money for growing further. It would rather retain the profit for investment rather than distributing it as dividend.

Q6) Because they would reinvest those profits to earn higher profits for the shareholders than what they could receive in the form of dividend.

jeff jeffy answered 2 years ago

Which of the following statements regarding Tobin’s q is (are) correct? I. Ceteris paribus, if the...

Which of the following statements regarding Tobin’s q is (are) correct? I. Ceteris paribus, if the interest rate decreases, Tobin’s q increases. II. Ceteris paribus, if the replacement cost of capital increases, Tobin’s q decreases. Answer: _________ a) None of the above. b) I only. c) II only. d) I and II.

Consider Tobin’s Q theory of investment. What are the determinants of investment? Does the empirical evidence...

Consider Tobin’s Q theory of investment. What are the determinants of investment? Does the empirical evidence agree with this theory? Does the neoclassical model of investment fit the evidence better than Tobin’s Q theory?

1. A firm operates with the production function Q=K2L. Q represents the daily output when the...

1. A firm operates with the production function Q=K2L. Q represents the daily output when the firm rents K units of capital and employs L workers. The manager has been given a production target: Produce 8,000 units per day. She knows the daily rental price of capital is $400 per unit. The wage rate paid to each worker is $200 per day. a. Currently the firm employs 80 workers per day. What is the firm’s total daily cost of producing...

Consider a pharmaceutical laboratory with the following cost information, where Q represents the number of units...

Consider a pharmaceutical laboratory with the following cost information, where Q represents the number of units of a vaccine: Supply curve or marginal private cost curve (MPC): MPC = 2000+ 4Q. Whenever a person gets vaccinated, they reduce the risk of suffering from infection for themselves. This is represented by the demand curve or marginal private benefit curve (MPB): MPB = 3000 –6Q. a) Plot these on a clearly labelled diagram and calculate the equilibrium price and quantity.In addition, whenever...

Suppose that output q represents the number of products produced,K is the number of machines used,...

Suppose that output q represents the number of products produced,K is the number of machines used, and L the number of workers used. To produce one unit of q, one must can use 1 machine OR 4 workers. The cost of a unit of K is r= 100, and the cost of a unit of L is w= 20:First, draw the isoquant for q= 10. Next, draw the isocost line for C= $2000.Using your isocost-isoquant diagram, identify the cost-minimizing number...

Explain the Common Denominator of Values secondary function of money.

assume a firm has the production function q=k^1/4L^1/4, where k represents capital, L represents labor, r...

assume a firm has the production function q=k^1/4L^1/4, where k represents capital, L represents labor, r represents the price of capital and w represents the price of labor. Using the Lagrange method, derive the optimal quantities of k and l as a function of q,r,w

Consider the three stocks in the following table. P(t) represents price at time t, and Q...

Consider the three stocks in the following table. P(t) represents price at time t, and Q (t) represents share outstanding at time t. Stock C splits two for one in the last period. P(0) Q(0) P(1) Q(1) P(2) Q(2) A 90 100 95 100 95 100 B 50 200 45 200 45 200 C 100 200 110 200 55 400 First, calculate the price weighted indexes at t=0 and t=1. Based on the two numbers calculate the rate of return....

Each box represents the respective production capacities for two countries that produce clothing and food. Q...

Each box represents the respective production capacities for two countries that produce clothing and food. Q is the quantity produced, L is labor. Each country has 1000 units of labor available. Clothing Food Canada Qc=1,000 Qf=3,000 Germany Qc=2,000 Qf=3,000 1. Who has the absolute advantage in producing clothing? Canada, Germany, Neither, or not enough info 2. Who had the absolute advantage in producing food? Canada, Germany, Neither, or not enough info 3. Who has the comparative advantage in producing clothing?...

The denominator of a fraction is 4 more than the numerator. If both the numerator and...

The denominator of a fraction is 4 more than the numerator. If both the numerator and the denominator of the fraction are increased by 3, the new fraction is 5/6 . Find the original fraction.

Question