The formula states that the numerator part is what the firm receives by the issuance of common equity and that figure increases or decreases depending upon the company is making profit or loss and then finally it decreases by issuing dividend and preference stock. From the balance sheet extract we can see that the total book value of common equity is 49500. It is also called market to book ratio.
Suppose the following is an extract from the equity side of the balance sheet of a business.
Book Value per Share Shareholders Equity - Preferred Equity Total Outstanding Common Shares For a more real-world example of book value per share in action lets turn to. The formula states that the numerator part is what the firm receives by the issuance of common equity and that figure increases or decreases depending upon the company is making profit or loss and then finally it decreases by issuing dividend and preference stock. The stock price per share can be found as the amount listed as such through the secondary stock market. The formula for calculating the book value per share of common stock is.