Book Value Per Share Quizlet

The stock trades for 3 per share.

Book value per share quizlet. What does book value per share mean. The new book value per share is. The book value per share bvps is a ratio that weighs stockholders total equity against the number of shares outstanding.

What is book value per share bvps. For example a company that is currently trading for 20 but has a book value of 10 is selling at twice its equity. In other words this measures a company s total assets minus its total liabilities on a per share basis.

Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. It also has 2 million in face value of debt that trades at 90 of par. What is the definition of book value per shares.

Book value per share is 10. The formula for book value per share is to subtract preferred stock from stockholders equity and divide by the average number of shares outstanding. Company x has 2 million shares of common stock outstanding at a book value of 2 per share.

Book value per share has increased. 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. In the case that the firm dissolves it is the amount the shareholders will receive.

In the example 100 000 minus 20 000 equals 80 000 of available equity. Be sure to use the average number of shares since the period end amount may incorporate a recent stock buyback or issuance which will skew the results. In our example 80 000 divided by 50 000 shares equals a book value per share of common stock of 1 60.