Book Value Per Preferred Share

Total equity preferred equity and total outstanding shares.

Book value per preferred share. The book value of a company stripped to basics is the value of the company the stockholders will own if the firm s. The information needed to calculate bvps is found on a company s balance sheet. 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.

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. 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 is a fairly conservative way to measure a stock s value. The book value per share is the minimum cash value of a company and its equity for common shareholders. It is because preferred stockholders are ranked higher than common stockholders during liquidation.

Book value of equity per share effectively indicates a firm s net asset value. In other words divide the applicable equity by the number of shares. Understanding book value per share.

Book value per share bvps takes the ratio of a firm s common equity divided by its number of shares outstanding. This will give you the amount of net assets that each preferred share owns or has the rights to. 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 preferred stock shown above in the stockholders equity section is cumulative and dividends amounting to 48 000 are in arrears. Calculate book value per share from the following stockholders equity section of a company. To find the equity you should subtract the company s liabilities from its assets.