Which of the following describes the book value per share of common stock?
A) Common equity divided by number of common shares outstanding
B) The current market value of a share of stock
C) The amount of net income per each share of stock
D) The par value of a share of stock

Question

Quizplus · Accepted Answer

Book value per share of common stock is calculated by dividing the common equity by the number of common shares outstanding, as common equity represents the net assets of the company attributable to the common shareholders.

Option B is incorrect as market value and book value are two different concepts. 
Option C is incorrect as net income per share is not related to the book value per share. 
Option D is incorrect as par value is the minimum price at which a company can issue its shares, and is not related to book value per share.

Which of the Following Describes the Book Value Per Share