Which of the following is the formula for computing book value per share of common stock?
A)Market price per share of common stock / earning per share
B)Annual dividend per share of common stock / market price per share of common stock
C)(Total stockholders' equity - preferred equity)/ number of shares of common stock outstanding
D)(Net income - preferred dividends)/ number of shares of common stock outstanding

Question

Quizplus · Accepted Answer

Book value per share of common stock is calculated by taking the total stockholders' equity and subtracting the preferred equity, then dividing by the number of shares of common stock outstanding. This gives the value of the company that is attributable to each share of common stock. Choices A, B, and D are not the correct formulas for computing book value per share of common stock.

Which of the Following Is the Formula for Computing Book