Investment, Tobin’s q, and Interest Rates

interest rates into a standard q-theoretic framework. Our generalized qmodel informs us to use corporate credit-risk information to predict investments when empirical mea-surement issues of Tobin’s average qare signi cant (e.g., equity is much more likely to be mis-priced than debt) as in Philippon (2009). Consistent with our theory, we ................
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