Should this firm invest (net) in more physical capital

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Given the following information, calculate Tobin's q statistic: Let's suppose that a company has one million outstanding shares of stock, each valued at $25. Let us suppose also that the replacement cost of its physical capital stock is $18 million.

a. Should this firm invest (net) in more physical capital?

b. Would your answer change if the replacement cost of its physical capital stock at this time was $25 million? $28 million?

Reference no: EM131136376

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