Total stockholders' equity consists of retained earnings of $150,000 and paid-in capital of $600,000.There are 30,000 common shares outstanding.What is the book value per share?

Question

Quizplus · Accepted Answer

Book value per share is calculated by dividing the total stockholders' equity by the number of common shares outstanding. 
Book value per share = (Retained earnings + Paid-in capital) / Number of common shares outstanding 
Book value per share = ($150,000 + $600,000) / 30,000 
Book value per share = $750,000 / 30,000 
Book value per share = $25.00 per share

Total Stockholders' Equity Consists of Retained Earnings of $150,000 and Paid-In