Book Value Per Share of Common Stock Is Derived by Which

question 55

Multiple Choice

Book value per share of common stock is derived by which of the following:

• A) Stockholders equity divided by the number of shares authorized.
• B) Stockholders equity divided by the number of shares outstanding.
• C) Net income divided by the number of shares outstanding.
• D) Net income divided by the number of shares authorized.

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Definitions:

Novation

The act of replacing an original party in a contract with a new party, with the consent of all involved, effectively creating a new contract.

Previous Valid Obligation

A duty or commitment that has been legally recognized and must be fulfilled as previously agreed or contracted.

Novation

The act of replacing an old obligation with a new one, thereby extinguishing the original obligation.

Consideration

In contract law, the benefit or value that each party agrees to give or receive as part of a legal agreement.