Firm Value, Risk, and Growth Opportunities

Hyun-Han Shin and René Stulz

No 7808, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We show that Tobin's q, as proxied by the ratio of the firm's market value to its book value, increases with the firm's systematic equity risk and falls with the firm's unsystematic equity risk. Further, an increase in the firm's total equity risk is associated with a fall in q. The negative relation between the change in total risk and the change in q is robust through time for the whole sample, but it does not hold for the largest firms.

JEL-codes: G30 G39 (search for similar items in EconPapers)
Date: 2000-07
New Economics Papers: this item is included in nep-cfn and nep-fin
Note: AP CF
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Citations: View citations in EconPapers (50)

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