In today’s briefing:
- Why Should Policy Shares Be Viewed as Including Deemed Shares Held?
Why Should Policy Shares Be Viewed as Including Deemed Shares Held?
- Tobin’s Q is not high for companies whose policy holdings are low relative to their net assets or total assets. When discussing policy shareholdings, deemed shareholdings should be included.
- Companies with a low ratio of total policy holdings plus deemed holdings to total assets have notably higher ROE, ROA, and Tobin’s Q. Vice versa.
- These companies generate returns exceeding their cost of capital and are managed with asset and capital efficiency in mind, which shows in their approach to policy shareholdings as governance practices.
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