Book Value Per Share of Stock

What is the Book Value Per Share of Stock?

The book value per share of stock is the price arrived at when you divide stockholders’ equity by the number of shares of common stock.

How it Works

A corporation has assets. 

Assets show what the business owns or what is owed to the business. 

The corporation also has liabilities. 

Liabilities show what the business owes. 

The difference between what the corporation owns and owes is the shareholders’ equity.

Shareholders’ equity is divided up into shares of stock. 

There are two types of share, one of which is preferred stock. 

Preferred shares are shares whose dividends are paid first. 

The other type of shares are known as common shares. 

Calculating Book Value of a Share of Stock

To calculate the book value per share of stock, take the value of shareholders’ equity. 

Deduct the value of any preferred stock. 

Then divide this by the number of shares of common stock.