Firm Value, Risk, and Growth Opportunities

37 Pages Posted: 22 Jul 2000 Last revised: 4 May 2022

See all articles by Hyun-Han Shin

Hyun-Han Shin

Yonsei University

René M. Stulz

Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

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Date Written: July 2000


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.

Suggested Citation

Shin, Hyun-Han and Stulz, Rene M., Firm Value, Risk, and Growth Opportunities (July 2000). NBER Working Paper No. w7808, Available at SSRN:

Hyun-Han Shin

Yonsei University ( email )

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Rene M. Stulz (Contact Author)

Ohio State University (OSU) - Department of Finance ( email )

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