- This topic has 3 replies, 4 voices, and was last updated 7 years, 10 months ago by
.
-
Posts
-
financial terms:meaning
while book value of equity per share is one factor that investor can use to determine whether a stock is undervalued ,this metric should not be used by itself as it firm’s situation. BVPS provides a snap shot of a firm’s current situation,but considerations of the firm’s future are not include.
Example:
XYZ crop,a widget producing company,may have a share price that is currently lower than its BVPS. this may not indicate that the xyz is undervalued,because looking the growth opportunties for the company are vastly limited as fewer people are buying widgets.
Book value of equity per share can be calculated by dividing company’s common equity value by its total number of shares outstanding.
It is a measure that represents a per share assessment of the minimum value of the company’s equity.
Book value of equity per share (BVPS) is a financial measure that represents a per share assessment of the minimum value of a company’s equity. More specifically, this value is determined by relating the original value of a firm’s common stock adjusted for any outflow (dividends and stock buybacks) and inflow (retained earnings) modifiers to the amount of shares outstanding.
calculated as
BVPS=Value of common equity/No. of shares outstanding
- You must be logged in to reply to this topic.
