Dear Forum,

I Need to calculate Tobin’s Q using Compustat Data.

For the numerator, I would use:

market value of equity (csho*prcc_f) + book value of debt (dltt+dlc)

Here I am struggling with the preferred stock - include?

For the denominator I would use:

total assets (at)

However, the denominator should be replacement value. I am furthermore asked to use this Definition of q: see attachment

I would be glad to have some opinions on that. Maybe some of you already calculated Tobin’sQ from Compustat and can share the method and variables used.

Thanks