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

Thomas Conine; Oscar W. Jensen; Maurry Tamarkin

doi:10.1287/mnsc.35.8.1004

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

Thomas Conine, Oscar W. Jensen, Maurry Tamarkin

Fairfield University

Research output: Contribution to journal › Article › peer-review

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.

Original language	American English
Journal	Management Science
Volume	35
DOIs	https://doi.org/10.1287/mnsc.35.8.1004
State	Published - Aug 1 1989

Disciplines

Business

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title = "On Optimal Production and the Market to Book Ratio Given Limited Shareholder Diversification",

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.",

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AB - 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.

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M3 - Article

VL - 35

JO - Management Science

JF - Management Science

ER -

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

Abstract

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