Book value per share:
A) Reflects the value per share if a company is liquidated at balance sheet amounts.
B) Is assets divided by equity.
C) Is assets divided by the number of ordinary shares outstanding.
D) Measures the worth of assets.
E) Is equal to par value per share.

Question

Quizplus · Accepted Answer

Book value per share reflects the amount that shareholders would theoretically receive if a company were liquidated at its balance sheet amounts. It is calculated as shareholders' equity divided by the number of outstanding shares, not simply assets divided by equity or the number of shares. It does not measure the worth of assets in the market nor is it equal to the par value per share.

Book Value Per Share