Book Value Per Share With Preferred Stock

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 per share with preferred stock. It is because preferred stockholders are ranked higher than common stockholders during liquidation. This figure represents the minimum value of a company s. Book value per share.

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. When calculating the book value per share of a company we base the calculation on the common stockholders equity stockholders equity stockholders equity also known as shareholders equity is an account on a company s balance sheet that consists of share capital plus and the preferred stock should be excluded from the value of equity. Book value per share is determined by dividing common shareholders equity by total number of outstanding shares.

In other words divide the applicable equity by the number of shares. The calculation of its book value per. The formula for book value per share requires three variables.

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. Calculate book value per share from the following stockholders equity section of a company. Total equity preferred equity and total outstanding shares.

The book value of a share of preferred stock is it s call price plus any dividends in arrears. 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 conclusion the book value per share is the minimum cash value of a company and its equity for 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. 2 576 000 800 000 48 000 100 000 shares 1 728 000 100 000 shares 17 28 per share of common stock. Total outstanding shares total number of shares issued shares as treasury stock.