A stock's book value is ________.
A) the current price of a share of stock in the stock market
B) the average price of one share of stock over the past year
C) the face value of a share of stock, set by the issuing company's board of directors
D) the value of a common stock expressed as total stockholders' equity divided by the total number of shares of stock issued

Question

Quizplus · Accepted Answer

A stock's book value is calculated by dividing the total stockholders' equity by the number of shares outstanding. This gives the per-share book value, which represents the value of the company's assets that would be left over for shareholders after all the liabilities have been paid off. Therefore, the correct choice is D, which states that a stock's book value is the value of a common stock expressed as total stockholders' equity divided by the total number of shares of stock issued.

A Stock's Book Value Is ________