Full Text:   <3056>

CLC number: F832.48

On-line Access: 

Received: 2004-02-23

Revision Accepted: 2004-03-06

Crosschecked: 0000-00-00

Cited: 0

Clicked: 5849

Citations:  Bibtex RefMan EndNote GB/T7714

-   Go to

Article info.
1. Reference List
Open peer comments

Journal of Zhejiang University SCIENCE A 2004 Vol.5 No.5 P.499-508


The Q theory of investment, the capital asset pricing model, and asset valuation: a synthesis

Author(s):  MCDONALD John F.

Affiliation(s):  College of Business Administration, University of Illinois at Chicago, Chicago, USA

Corresponding email(s):   mcdonald@uic.edu

Key Words:  Investment theory, Asset pricing, Appraisal

Share this article to: More

MCDONALD John F.. The Q theory of investment, the capital asset pricing model, and asset valuation: a synthesis[J]. Journal of Zhejiang University Science A, 2004, 5(5): 499-508.

@article{title="The Q theory of investment, the capital asset pricing model, and asset valuation: a synthesis",
author="MCDONALD John F.",
journal="Journal of Zhejiang University Science A",
publisher="Zhejiang University Press & Springer",

%0 Journal Article
%T The Q theory of investment, the capital asset pricing model, and asset valuation: a synthesis
%J Journal of Zhejiang University SCIENCE A
%V 5
%N 5
%P 499-508
%@ 1869-1951
%D 2004
%I Zhejiang University Press & Springer
%DOI 10.1631/jzus.2004.0499

T1 - The Q theory of investment, the capital asset pricing model, and asset valuation: a synthesis
J0 - Journal of Zhejiang University Science A
VL - 5
IS - 5
SP - 499
EP - 508
%@ 1869-1951
Y1 - 2004
PB - Zhejiang University Press & Springer
ER -
DOI - 10.1631/jzus.2004.0499

The paper combines Tobin's Q theory of real investment with the capital asset pricing model to produce a new and relatively simple procedure for the valuation of real assets using the income approach. Applications of the new method are provided.

Darkslateblue:Affiliate; Royal Blue:Author; Turquoise:Article


[1] Bond, S., Patel, A., 2003. The conditional distribution of real estate returns: Are higher moments time varyingJournal of Real Estate Finance and Economics,26:319-339.

[2] Bossaerts, P., 2002. The Paradox of Asset Pricing. Princeton University Press, Princeton, p.2-21.

[3] Campbell, J., Lo, A., MacKinlay, A., 1997. The Econometrics of Financial Markets. Princeton University Press, Princeton.

[4] Corgel, J., Ling, D., Smith, H., 2001. Real Estate Perspectives. McGraw-Hill, Irwin, New York, p.73, 326, 332, 334, 161-165.

[5] Craine, R., 1989. Risky business: the allocation of capital.Journal of Monetary Economics,23:201-218.

[6] Fama, E., 1965. Portfolio analysis is a stable Paretian market.Management Science,11(4):404-419.

[7] Gyrouko, J., Nelling, E., 1996. Systematic risk and diversification in the equity REIT market.Real Estate Economics,24:493-515.

[8] Hamada, R., 1969. Portfolio analysis, market equilibrium, and corporation finance.Journal of Finance,24(1):13-31.

[9] Lusht, K., 1997. Real Estate Valuation. Irwin, Chicago, p.19, 177.

[10] McDonald, J., 2002. Property taxation and optimal capital structure in real estate investment.Review of Accounting and Finance,1(2):5-22.

[11] Rajan, G., Zingales, L., 2003. Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity. Crown Business, New York.

[12] Ring, A., Boykin, J., 1986. The Valuation of Real Estate. Prentice-Hall, Englewood Cliffs, NJ, p.206.

[13] Romer, D., 1996. Advanced Macroeconomics. McGraw-Hill, New York.

[14] Rubenstein, M., 1973. A mean-variance synthesis of corporate financial theory.Journal of Finance,28:167-181.

[15] Tobin, J., 1952. Asset holdings and spending decisions.American Economic Review,42(May):109-123.

[16] Tobin, J., 1969. A general equilibrium approach to monetary theory.Journal of Money, Credit, and Banking,1(Feb.):15-29.

[17] Tobin, J., Golub, S., 1998. Money, Credit, and Capital. Irwin McGraw-Hill, New York, p.159-160.

[18] Young, M., Graff, R., 1995. Real estate is not normal: a fresh look at real estate return distributions.Journal of Real Estate Finance and Economics,10(3):225-259.

Open peer comments: Debate/Discuss/Question/Opinion



2010-11-02 19:54:38


Please provide your name, email address and a comment

Journal of Zhejiang University-SCIENCE, 38 Zheda Road, Hangzhou 310027, China
Tel: +86-571-87952783; E-mail: cjzhang@zju.edu.cn
Copyright © 2000 - 2024 Journal of Zhejiang University-SCIENCE