What is Book Value per Share?
It is parameter used by common share owners of the company to decide the safety level linked to every individual shares after paying all the respective debts.
Book Value per Share = (Total Shareholder’s Equity – Preferred Equity) / Total Outstanding shares
Why You Care
At the time of dissolving the company, the book value per share of the company determines the overall value remained after all assets of the company are liquidated and debtors are rightly paid. In short, it is corpus which common shareholders of the company would receive in case a company opts for liquidation.
Return on Assets,
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