Book Value Per Share Of Capital Stock Formula

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.

Book value per share of capital stock formula. 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. The book value per common share formula below is an accounting measure based on historical transactions. Total equity preferred equity and total outstanding shares.

The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. Where common stock at par par value number of shares issued. 1 776 000 100 000 shares 17 76 per share of common stock 2.

Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes. 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. Assume there is a company x whose publicly traded stock price is 20 and it.

The book value per share is the minimum cash value of a company and its equity for common shareholders. This figure represents the minimum value of a company s. Dividend per share per annum are forecasted based on actual growth rate in initial years the value of stock at the end of initial high growth period called terminal value is determined using the single stage dividend growth model or using some price multiple such as p e ratio and the dividends and the terminal value are discounted at the required return on equity i e.

Calculate book value per share from the following stockholders equity section of a company. Of equity shares outstanding. To find the equity you should subtract the company s liabilities from its assets.

After such modification we get the following widely used formula to calculate book value per share. Additional paid in capital number of shares amount at which shares issued par value retained earning net income dividend. If company has issued common as well as preferred stock.