Book Value Of Equity
Book value of equity per share A metric that investors use with regard to book value is BVPS or Book Value of Equity per Share.
Book value of equity. This figure represents the minimum value of a. Its most common application is by investors on a per share basis when evaluating the price at which a publicly-held companys stock sells. It takes the net value of a listed companys assets also known as shareholders equity and divides it by the total number of outstanding shares of that organisation.
It is computed as the net amount remaining after deducting all of the companys liabilities from its total assets. Price to Book Value Ratio Interpretation and Derivation 2302 In this Price to Book Value Ratio Interpretation and Derivation lesson youll learn about the relationship between Price to Book Value PBV Return on Equity ROE and Cost of Equity Ke for commercial banks including how you can derive a formula for PBV that links these key variables plus Net Income Growth. The book value per share BVPS is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.
It can be greater than less than or equal to zero. Accounting Homework help is badly needed help for the student now days. Douglas acquired 195000 shares.
A companys market value of equity differs from its book value of equity because the book value of equity focuses on owned assets and owed liabilities. When compared to the current market value per share the book value per share can provide information on how a companys stock is valued. Put another way if a company were to close its doors sell its assets and pay off its debts the book value of equity is theoretically the amount that would remain to be divided up among the shareholders.
Book value of equity is an estimate of the minimum shareholders equity of a company. It can also be greater than less than or equal to. Value of preferred stock.
As such the larger the number of commons stocks there are the lower the value of the book value. Book Value of Equity Meaning. On January 1 Douglas Stores Incorporated acquired 30 of Kirk Shoe Company.
