The book value per share is obtained by dividing?
Shareholders equity by outstanding shares
Total assets by outstanding shares
Gross profit by outstanding shares
Net profit by outstanding shares
Correct answer is A
To calculate the book value per share, you must first calculate the book value, then divide by the number of common shares. Also, since you're working with common shares, you must subtract the preferred shareholder equity from the total equity. Hence we have;
Book Value per Share = (Shareholders' Equity - Preferred Equity) / Total Outstanding Common Shares.