Book Value Per Share Liquidation

Should the company dissolve the book value per.

Book value per share liquidation. As an example assume liabilities for company a are 550 000. Liquidation value per share 581 312 000 222 412 000 2 61x. We note that the total number of basic shares outstanding is 222 412 000 source.

It indicates the level of safety associated with each common share after removing the effects of liabilities. 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. Thus it s a true value of a business.

The book value of a company is the difference between that company s total assets and total liabilities and not its share price in the market. Book value for common shareholders 10 000 000 1 000 104 1 000 000 9 90 per share any cumulative dividends in arrears must also be subtracted since these dividends must be paid before common stockholders can receive anything in a bankruptcy or a liquidation. Liquidation is the difference between some value of tangible assets and liabilities.

Book value is the value of the company s assets which can be received by the shareholders in the event of company s liquidation or during bankruptcy. The formula for book value per share is to subtract preferred stock from stockholders equity and divide by the average number of shares outstanding. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.

In order to find the per share liquidation value we require the total number of shares outstanding. The book value per share is the amount of the assets that will go to common equity in the event of liquidation. What is the book value per share bvps.

Book value per share b s is can be calculated by subtracting liabilities from assets and then dividing it by the total number of currently outstanding shares. Thus its the residual value after paying off all the liabilities debt borrowings and payables and preference holders in the event of liquidation. Also assume the book.