Book Value Per Share Of Capital Stock

For example a company has a p b of.

Book value per share of capital stock. 2 576 000 800 000 48 000 100 000 shares 1 728 000 100 000 shares 17 28 per share of common stock. In this balance sheet in the equity column two components are mentioned. 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.

Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. The price to book p b ratio is a popular way to compare market value and book value. Calculate book value per share from the following stockholders equity section of a company.

The preferred stock shown above in the stockholders equity section is cumulative and dividends amounting to 48 000 are in arrears. Book value per share is a fairly conservative way to measure a stock s value. 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.

This change is attributed to the value of the common stock at par which has been issued at the time of ipo. 2 treasury shares. For example a company that is currently trading for 20 but has a book value of 10 is selling at twice its equity.

This figure represents the minimum value of a company s. That means change is around 625 4 million. It is equal to the price per share divided by the book value per share.

The book value per share may be used by some investors to determine the equity in a company relative to the market value of the company which is the price of its stock. At times companies buy back some of the floating shares as part of corporate strategy. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.