Book Value Per Share Of 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 of preferred stock. The book value of a share of preferred stock is it s call price plus any dividends in arrears. To find the equity you should subtract the company s liabilities from its assets. The information needed to calculate bvps is found on a company s balance sheet.

The book value per share is the minimum cash value of a company and its equity for common shareholders. 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. This will give you the amount of net assets that each preferred share owns or has the rights to.

Total equity preferred equity and total outstanding shares. Accounting for book value per share of common stock equity value of common stock book value per share of stock is the amount each share would receive if th. The calculation of its book value per.

It is because preferred stockholders are ranked higher than common stockholders during liquidation. 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.

Book value per share bvps takes the ratio of a firm s common equity divided by its number of shares outstanding. 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.

The formula for book value per share requires three variables. In other words divide the applicable equity by the number of shares. The preferred stock shown above in the stockholders equity section is cumulative and dividends amounting to 48 000 are in arrears.