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Working Paper

Tobin's Q, Investment, and the Endogenous Adjustment of Financial Structure

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An analysis of a q model of investment in which financial structure affects firm value, using a perfect foresight model of general equilibrium that includes a debt-related agency cost; uses the comparative statics and dynamics of changing the corporate tax rate as an illustration.
04.01.1988ISSN 2573-7953 WP 88-01

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.

Suggested Citation

Osterberg, William P. 1988. “Tobin's Q, Investment, and the Endogenous Adjustment of Financial Structure.” Federal Reserve Bank of Cleveland, Working Paper No. 88-01.