Tobin's Q ratio for company I in year t; (Tobin qit)
Tobin's Q ratio has been proposed as an important technique for the assessment of managers' operations.
In the present study, according to the studies by Namazi and Zeraatgari (2009), Moradi and Pourhassan (2010) and due to the high degree of correlation and approximate equality of estimates of different versions of Tobin's Q on the one hand and the difficulty of calculating the replacement value of assets and liabilities in Iran stock market on the other hand, the simple Tobin's Q ratio is used as follows:
The analysis of the third hypothesis: there is a significant relationship between the ratio of debt and Tobin's q ratio.
Skandia AFS, an insurance company in Stockholm, Sweden, uses a variant of Tobin's Q ratio
to measure the value of ideas.
Although Tobin's q ratio is ideal, we can not compute the Tobin's q ratio for many cases due to incomplete data.
We find sufficient data on COMPUSTAT to calculate the m/b ratio for 212 ESOPs, leverage-controlled ROA for 111 ESOPs, and Tobin's q ratio for 119 ESOPs over a five-year period from year t - 1 to year t + 3.
We draw a similar conclusion from changes in Tobin's q ratio and ROA.
A similar pattern is found with the Tobin's q ratio and ROA analysis.
We conclude that, on average, the marginal and average Tobin's Q ratios differ for firms in the sample.
47 Table 1 Estimated Tobin's Q Ratios and Announcements by Firm Average Q is calculated as the ratio of the market value of the firm to replacement cost.
Our procedure for estimating Tobin's q ratios
for each firm follows the Perfect and Wiles (1994) method: