Book Value Per Share Common Stock

If book value per share is calculated with just common stock in the denominator then it results in a measure of the amount that a common shareholder would receive upon liquidation of the company.

Book value per share common stock. If the value of bvps exceeds the market value per share the. Some stockholders have keen interest in knowing the book value of the shares they own. The formula for book value per share is to subtract preferred stock from stockholders equity and divide by the average number of shares outstanding.

What does book value per share mean. In other words this is the equity value of each common stock. When compared to the current market value per share the book value per share can provide information on how a company s stock is valued.

Book value per share book value per share bvps is a measure of value of a company s common share based on book value of the shareholders equity of the company. Finally we divide the current share price of 15 by that 10 to reach a price to book. This figure represents the minimum value of a company s.

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 book value per share formula is used to calculate the per share value of a company based on its equity available to common shareholders. 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. This article is focused on its calculation. The book value per common share is a financial ratio that calculates amount of equity applicable to each outstanding common stock.

The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. Book value per share is usually used to compute the value or price per share of. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.