A Simple Approximation of Tobin's Q

  title={A Simple Approximation of Tobin's Q},
  author={K. Chung and Stephen W. Pruitt},
  journal={Financial Management},
  • K. Chung, Stephen W. Pruitt
  • Published 1994
  • Mathematics
  • Financial Management
  • This paper develops a simple formula for approximating Tobin's q. The formula requires only basic financial and accounting information. Results of a series of regressions comparing our approximate q values with those obtained via Lindenberg and Ross' (1981) more theoretically correct model indicate that at least 96.6% of the variability of Tobin's q is explained by approximate q. 
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