What is the difference between book value and share value of a company?
Please explain book value and share rate fluctuations
Public Comments
- book value of share means total assets less all liabilities less preferredstock divided by number of outstanding shares where share value in general terms mean its market price in stock exchange
- share value is influenced by a number of factors, a main one being a company's earnings, growth rate, industry, etc. it is of course somewhat speculative. book value on the other hand takes those variables out of the mix-it is what a company is worth absent of what the stocks trade for...simply put, what would a company be worth if it closed down. since shares represent ownership, the shareholders would get paid based on book value, calculated as: (assets) minus (liabilities + preferred stock) because preferred stockholder get paid first. so, say a company has 10,000 shares of stock issued. after paying all debt and preferred stockholders, they have one million dollars in assets left-that includes cash, equipment, real estate, etc. one million dollars is the total book value of the company book value per share is $100
- in simple terms market value is the price at which it is quoted in the stock exchange market, and you can sell at that price. you may have to spend some commissions or brokerage for selling the shares; book value is the value calculated on basis of company's net worth. net worth in simple term is company;s liabilities minus companies assets.. if assets are more than liabilities, then share price is more than the price at which shares were brought. But for a layman, book value is the value at which it was bought..
- Not to be technical...Book value is a companies value today based on its assets and liabilities....share value is the value of a company taking into account future profitability which is determined by supply and demand of it's equity on the market.
Powered by Yahoo! Answers