Book Value Per Share Of Preferred Stock

The calculation of its book value per.

Book value per share of preferred stock. To find the equity you should subtract the company s liabilities from its assets. In other words divide the applicable equity by the number of shares. Accounting for book value per share of common stock equity value of common stock book value per share of stock is the amount each share would receive if th.

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 information needed to calculate bvps is found on a company s balance sheet.

Comparing bvps to a stock s market price could help value investors find opportunities. 2 576 000 800 000 48 000 100 000 shares 1 728 000 100 000 shares 17 28 per share of common stock. Calculate book value per share from the following stockholders equity section of a company.

The formula for book value per share requires three variables. The book value per preferred share is calculated by dividing the call price or par value plus the cumulative dividends in arrears by the number of outstanding preferred shares. This will give you the amount of net assets that each preferred share owns or has the rights to.

Xyz stock has 15 million of stockholders equity 3 million of preferred stock and an average of 2 million shares outstanding during the measurement period. Book value of equity per share effectively indicates a firm s net asset value. 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. If a 5 percent cumulative preferred stock having a par value of 100 a share has a call price of 110 a share and the corporation owes two years of dividends the book value of the preferred stock is 120 per share. It is because preferred stockholders are ranked higher than common stockholders during liquidation.