The book value of a company's common stock is determined by
A) what buyers are willing to invest in a firm.
B) dividing total assets by the number of outstanding shares.
C) dividing total shareholders' equity by the number of outstanding shares.
D) dividing net profit by the number of outstanding shares.
E) stock brokers' opinions and ratings.

Question

Quizplus · Accepted Answer

The book value of a company's common stock is determined by dividing total shareholders' equity by the number of outstanding shares. This calculation provides an estimate of the value of the company's assets that would be distributed to shareholders if the company were to liquidate.

The Book Value of a Company's Common Stock Is Determined