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Book Value Per Common Share (BVPS): Definition and Calculation
What Is E-book Price Per Widespread Share?
E-book price per frequent share (or, merely book price per share – BVPS) is a method to calculate the per-share book price of a corporation primarily based totally on frequent shareholders’ equity throughout the agency. The book price of a corporation is the excellence between that agency’s entire belongings and entire liabilities, and by no means its share price on the market.
Should the company dissolve, the book price per frequent share signifies the buck price remaining for frequent shareholders finally belongings are liquidated and all collectors are paid.
Key Takeaways
- E-book price per frequent share (BVPS) calculates the frequent stock per-share book price of a company.
- Since hottest stockholders have the subsequent declare on belongings and earnings than frequent shareholders, hottest equity is subtracted from shareholder’s equity to derive the equity obtainable to frequent shareholders.
- If a corporation’s BVPS is larger than its market price per share, then its stock is also thought-about to be undervalued.
The Parts for E-book Price Per Widespread Share Is:
The book price per frequent share (formulation beneath) is an accounting measure primarily based totally on historic transactions: