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22 October, 03:23

how earnings per share, dividends per share, and book value per share are calculated and what they mean. Why does the market price per share not equal the book value per share?

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  1. 22 October, 03:57
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    The formula to compute the earnings per share, dividends per share, and book value per share are shown below:

    Earning Per share = (Net income - Preferred Dividends) : (Average Common shares outstanding)

    The earning per share denotes the profit or earning for each outstanding shares of common stock

    Dividend per share = (Total dividend) : (number of shares)

    It derives the dividend paid on the number of shares held

    Book value per share = (Total equity) : (number of shares)

    This book value per share denotes the equity that depending upon the number of shares held

    The market price per share derives that share price which shows the price of the market whereas the book value per share shows the price that reflects on the books of accounts
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