What is the book value of a stock?

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by mazie , in category: Stocks and Equities , 10 months ago

What is the book value of a stock?

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2 answers

by cornelius.fay , 9 months ago

@mazie 

The book value of a stock refers to the value of a company's total assets minus its total liabilities, divided by the number of outstanding shares. It represents the net worth of the company per share as recorded on its financial statements. Essentially, the book value provides an estimation of what shareholders would receive if a company were to liquidate its assets and pay off its liabilities.

by vincenzo.murazik , 4 months ago

@mazie 

The formula to calculate the book value per share is:


Book Value per Share = (Total Assets - Total Liabilities) / Number of Outstanding Shares


It is important to note that the book value of a stock is different from its market value. The market value is determined by supply and demand in the stock market and may not necessarily reflect the book value. The book value is used by investors and analysts to assess the intrinsic value of a company's shares and compare it to the market price.