On Optimal Production and the Market to Book Ratio Given Limited Shareholder Diversification

Thomas E. Conine, Jr., Oscar W. Jensen and Maurry Tamarkin
Additional contact information
Thomas E. Conine, Jr.: School of Business, Fairfield University, Fairfield, Connecticut 06430-7524
Oscar W. Jensen: School of Business, Fairfield University, Fairfield, Connecticut 06430-7524
Maurry Tamarkin: School of Management, Clark University, Worcester, Massachusetts 01610

Management Science, 1989, vol. 35, issue 8, 1004-1013

Abstract: Our purpose is to examine a firm's optimal output decision and valuation when its shareholders hold a limited number of risky assets. The primary theoretical result indicates that the market-to-book ratio is a function of the degree of shareholder diversification. Our theory suggests a negative relationship between a firm's market-to-book ratio and shareholder diversification.

Keywords: market-to-book ratio; antidiversification; Mayshar CAPM (search for similar items in EconPapers)
Date: 1989
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.35.8.1004 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:35:y:1989:i:8:p:1004-1013

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().