Definition of Book Value Per Share



Book value per share is the value per share against the book value of total equity in a company’s balance sheet. To find out the book value per share just divide the book value of stockholders’ equity by the number of outstanding shares.

For example, Samsung Inc. has total equity of $50 million and a total of 25 million shares are outstanding, the book value per share will be calculated as follows

Book value per share = $50 million / 25 million shares

In case the book value per share is lower than the current market price, the share is considered overvalued and if the current market price of the share is lower than the book value per share, then the share is considered undervalued.


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