Book Value Per Preferred Share

Book value per share is a fairly conservative way to measure a stock s value.

Book value per preferred share. Calculate book value per share from the following stockholders equity section of a company. Book value per share is a ratio that compares the net asset value of a company minus preferred equity to the total number of common shares available on the market. The book value per share is the minimum cash value of a company and its equity for common shareholders.

To find the equity you should subtract the company s liabilities from its assets. Calculate the total book value of a corporation s preferred stock by multiplying the book value of each share by the total number of shares outstanding. In other words divide the applicable equity by the number of shares.

2 576 000 800 000 48 000 100 000 shares 1 728 000 100 000 shares 17 28 per share of common stock. The preferred stock shown above in the stockholders equity section is cumulative and dividends amounting to 48 000 are in arrears. Book value per common share or simply book value per share bvps is a method to calculate the per share book value of a company based on common shareholders equity in the company.

The term book value is a company s assets minus its liabilities and is sometimes referred to as stockholder s equity owner s equity shareholder s equity or simply equity. The book value of a company stripped to basics is the value of the company the stockholders will own if the firm s. Understanding book value per share.

This will give you the amount of net assets that each preferred share owns or has the rights to. When calculating the book value per share of a company we base the calculation on the common stockholders equity stockholders equity stockholders equity also known as shareholders equity is an account on a company s balance sheet that consists of share capital plus and the preferred stock should be excluded from the value of equity. Comparing bvps to a stock s market price could help value investors find opportunities.

For example if the book value of the company s preferred stock is 120 per share and there are 1 million outstanding shares the total book value of the company s preferred shares is 120 million. The information needed to calculate bvps is found on a company s balance sheet. The formula for book value per share requires three variables.