• The Q relation was popularized by Nobel laureate James Tobin and invented in 1966 by Nicholas Kaldor.

  • The Q factor, also known as Tobin’s Q, measures whether a firm or an aggregate market is relatively overvalued or undervalued.
  • It relies on the concepts of market value and replacement value.
  • Simplified Q is the market value of the shares divided by the book value of the shares.