Is book value per share the same as price per share?
Book value of equity per share indicates a firm’s net asset value (total assets – total liabilities) on a per-share basis. When a stock is undervalued, it will have a higher book value per share in relation to its current stock price in the market.
What is the book value per share?
The book value of assets and shares are the value of these items in a company’s financial records. The book value per share is a market value ratio that weighs stockholders’ equity against shares outstanding. In other words, the value of all shares divided by the number of shares issued.
Is a higher or lower book value per share better?
The book value per share is the amount of the assets that will go to common equity in the event of liquidation. So higher book value means the shares have more liquidation value. Strictly speaking, the higher the book value, the more the share is worth.
Why is book value per share less than stock price?
A company’s book value is the amount it would receive if it sold all of its assets, such as buildings, land, equipment, etc… and paid for all of its liabilities, such as debt. Its stock price, however, reflects the actual value of the company as seen by the market. This factors in the intangibles.