Book Value Per Share Of Capital Stock Formula

After such modification we get the following widely used formula to calculate book value per share.

Book value per share of capital stock formula. The formula for book value per share requires three variables. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. The book value per common share formula below is an accounting measure based on historical transactions.

Book value per share conclusion. To find the equity you should subtract the company s liabilities from its assets. Book value total assets total liabilities preferred stock intangible assets.

Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes. 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.

The book value per share is the minimum cash value of a company and its equity for common shareholders. Dividend per share per annum are forecasted based on actual growth rate in initial years the value of stock at the end of initial high growth period called terminal value is determined using the single stage dividend growth model or using some price multiple such as p e ratio and the dividends and the terminal value are discounted at the required return on equity i e. This figure represents the minimum value of a company s.

Bvps frac total shareholder equity preferred equity total outstanding. Book value par value additional paid in capital retained earning. 1 776 000 100 000 shares 17 76 per share of common stock 2.

When compared to the current market value per share the book value per share can provide information on how a company s stock is valued. Of equity shares outstanding. 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.