Acme Widget, Inc. has 1,000 shareholders who own a total of one million shares of its common stock. The company earned $10 million after taxes and paid out $4 million in dividends. The firm has assets of $125 million and liabilities of $25 million. What is the book value per share?
A) $4
B) $125
C) $10
D) $100
E) $25

Question

Quizplus · Accepted Answer

Book value per share is calculated by taking the total shareholder's equity (assets - liabilities) and dividing by the number of shares outstanding.

Total shareholder's equity = assets - liabilities = $125 million - $25 million = $100 million

Book value per share = total shareholder's equity / number of shares outstanding
= $100 million / 1 million shares
= $100

Therefore, the book value per share is $100, which is option D.