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Financial Terms | |
Tobin's Q |
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Definition of Tobin's QTobin's QMarket value of assets divided by replacement value of assets. A tobin's Q ratio greater than 1
Related Terms:Q ratio or Tobin's Q ratioMarket value of a firm's assets divided by replacement value of the firm's assets. Account ValueThe sum of all the interest options in your policy, including interest. Accumulated ValueAn amount of money invested plus the interest earned on that money. Acquisition of assetsA merger or consolidation in which an acquirer purchases the selling firm's assets. Adjusted present value (APV)The net present value analysis of an asset if financed solely by equity Affirmative covenantA bond covenant that specifies certain actions the firm must take. approximated net realizable value at split-off allocationa method of allocating joint cost to joint products using a ![]() AssetsA firm's productive resources. ASSETSAnything of value that a company owns. AssetsThings that the business owns. AssetsItems owned by the company or expenses that have been paid for but have not been used up. Assets requirementsA common element of a financial plan that describes projected capital spending and the Auction marketsMarkets in which the prevailing price is determined through the free interaction of Bargain-purchase-price optionGives the lessee the option to purchase the asset at a price below fair Market Bear marketAny Market in which prices are in a declining trend. bear marketA Market in which stock or bond prices are generally ![]() Bear MarketA prolonged period of falling stock Market prices. Benefit ValueThe amount of cash payable on a benefit. Black marketAn illegal Market. Bond valueWith respect to convertible bonds, the value the security would have if it were not convertible Book valueA company's book value is its total assets minus intangible assets and liabilities, such as debt. A BOOK VALUEAn asset’s cost basis minus accumulated depreciation. Book ValueThe value of an asset as carried on the balance sheet of a Book valueAn asset’s original cost, less any depreciation that has been subsequently incurred. book valueNet worth of the firm’s assets or liabilities according book value and book value per shareGenerally speaking, these terms BOOK VALUE OF COMMON STOCKThe theoretical amount per share that each stockholder would receive if a company’s assets were sold on the balance sheet’s date. Book value equals: Book value per shareThe ratio of stockholder equity to the average number of common shares. Book value Book Value per ShareThe book value of a company divided by the number of shares Brokered marketA Market where an intermediary offers search services to buyers and sellers. Bull marketAny Market in which prices are in an upward trend. bull marketA Market in which stock or bond prices are generally rising. Bull MarketA prolonged period of rising stock Market prices. Bulldog marketThe foreign Market in the United Kingdom. Business Expansion InvestmentThe use of capital to create more money through the addition of fixed assets or through income producing vehicles. business-value-added activityan activity that is necessary for the operation of the business but for which a customer would not want to pay CAPITAL IN EXCESS OF PAR VALUEWhat a company collected when it sold stock for more than the par value per share. capital investment analysisRefers to various techniques and procedures Capital InvestmentsMoney used to purchase fixed assets for a business, such as land, buildings, or machinery. Also, money invested in a business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses. Capital marketThe Market for trading long-term debt instruments (those that mature in more than one year). Capital marketThe Market in which investors buy and sell shares of companies, normally associated with a Stock Exchange. Capital MarketA Market that specializes in trading long-term, relatively high risk Capital MarketThe Market in which savings are made available to those needing funds to undertake investment projects. A financial Market in which longer-term (maturity greater than one year) bonds and stocks are traded. Capital market efficiencyReflects the relative amount of wealth wasted in making transactions. An efficient Capital market imperfections viewThe view that issuing debt is generally valuable but that the firm's Capital market line (CML)The line defined by every combination of the risk-free asset and the Market portfolio. capital marketsMarkets for long-term financing. Carrying valueBook value. Cash marketsAlso called spot Markets, these are Markets that involve the immediate delivery of a security Cash-surrender valueAn amount the insurance company will pay if the policyholder ends a whole life Cash Surrender ValueThis is the amount available to the owner of a life insurance policy upon voluntary termination of the policy before it becomes payable by the death of the life insured. This does not apply to term insurance but only to those policies which have reduced paid up values and cash surrender values. A cash surrender in lieu of death benefit usually has tax implications. Cash Surrender ValueBenefit that entitles a policy owner to an amount of money upon cancellation of a policy. Cash value added (CVA)A method of investment appraisal that calculates the ratio of the net present value of an Closing purchaseA transaction in which the purchaser's intention is to reduce or eliminate a short position in Common marketAn agreement between two or more countries that permits the free movement of capital Common stock marketThe Market for trading equities, not including preferred stock. Complete capital marketA Market in which there is a distinct Marketable security for each and every Confirmationhe written statement that follows any "trade" in the securities Markets. Confirmation is issued Conversion valueAlso called parity value, the value of a convertible security if it is converted immediately. Corner A MarketTo purchase enough of the available supply of a commodity or stock in order to Current assetsvalue of cash, accounts receivable, inventories, Marketable securities and other assets that Current assetsCash, things that will be converted into cash within a year (such as accounts receivable), and inventory. Current assetsAmounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments. current assetsCurrent refers to cash and those assets that will be turned Current AssetsCash and other company assets that can be readily turned into cash within one year. Dealer marketA Market where traders specializing in particular commodities buy and sell assets for their Debt marketThe Market for trading debt instruments. Derivative marketsMarkets for derivative instruments. Direct search marketBuyers and sellers seek each other directly and transact directly. Direct stock-purchase programsThe purchase by investors of securities directly from the issuer. Dividend reinvestment plan (DRP)Automatic reinvestment of shareholder dividends in more shares of a DLOM (discount for lack of marketability)an amount or percentage deducted from an equity interest to reflect lack of Marketability. Domestic marketPart of a nation's internal Market representing the mechanisms for issuing and trading Economic Value Added (EVA)Operating profit, adjusted to remove distortions caused by certain accounting rules, less a charge economic value added (EVA)a measure of the extent to which income exceeds the dollar cost of capital; calculated economic value added (EVA)Term used by the consulting firm Stern Stewart for profit remaining after deduction of the cost Efficient capital marketA Market in which new information is very quickly reflected accurately in share efficient capital marketsFinancial Markets in which security prices rapidly reflect all relevant information about asset values. Efficient Market HypothesisIn general the hypothesis states that all relevant information is fully and Efficient Markets HypothesisThe hypothesis that securities are typically in equilibrium--that they are fairly priced in the sense that the price reflects all publicly available information on the security. Either-way marketIn the interbank Eurodollar deposit Market, an either-way Market is one in which the bid Emerging marketsThe financial Markets of developing economies. Equilibrium market price of riskThe slope of the capital Market line (CML). Since the CML represents the Equity investmentThrough equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock. Equity marketRelated:Stock Market Eurocurrency marketThe money Market for borrowing and lending currencies that are held in the form of Excess return on the market portfolioThe difference between the return on the Market portfolio and the Exchange of assetsAcquisition of another company by purchase of its assets in exchange for cash or stock. Exercise valueThe amount of advantage over a current Market transaction provided by an in-the-money Exit valueThe value that an asset is expected to have at the time it is sold at a predetermined Expected return on investmentThe return one can expect to earn on an investment. See: capital asset Expected valueThe weighted average of a probability distribution. Expected ValueThe value of the possible outcomes of a variable weighted by the Expected value of perfect informationThe expected value if the future uncertain outcomes could be known External marketAlso referred to as the international Market, the offshore Market, or, more popularly, the Extraordinary positive valueA positive net present value. Face valueSee: Par value. Face ValueThe nominal value of a security. Also called the par value. Face valueThe maturity value of a security. Also known as par value, face valuePayment at the maturity of the bond. Also called par value or maturity value. Face ValueThe payoff value of a bond upon maturity. Also called par value. See principal. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |