Book Value Per Share Treasury Shares
Book value per share is a fairly conservative way to measure a stock s value.
Book value per share treasury shares. 500 shares of treasury stock are purchased for 14 per share. Book value per share for the purpose of analysis the book value of equity is further divided by a total number of shares to make book value per share. The book value per share of common stock of lawrence company is 10.
Dollar tree s share count went from 114 million to about 90 million shares through share buybacks a decrease of 21. The company s annual earnings of 15 million aren t affected by the. This means if the company dissolves the shareholders will receive an amount per share as per book value per share.
Book value per share represents equity of the firm on per share basis. 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. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.
Example of treasury shares abc company had originally sold 5 000 shares of common stock with a 1 par value for 41 per share. Due to share s issued for stock options and shares issued for restricted stock units the balance treasury stocks at the end of 2014 was 558 994 215 shares. 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 company currently has 10 million shares outstanding but decides to buy back 4 million off them which become treasury stock. 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. This figure represents the minimum value of a company s.
It therefore had 5 000 common stock 5 000 shares 1 par value.