A common stock's book value is calculated
A)as a multiple of the stock's price/earning ratio
B)on the basis of income statement ratios
C)on the basis of balance sheet figures
D)on the value of income statement figures

Question

Quizplus · Accepted Answer

Book value is calculated based on the assets and liabilities listed on a company's balance sheet. It represents the amount of equity shareholders would receive if a company were to liquidate its assets and pay off all its liabilities. Therefore, the correct choice is C, on the basis of balance sheet figures.

A Common Stock's Book Value Is Calculated