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What does 'book equity' mean? I am currently studying Corporate Finance.?



What does 'book equity' mean? I am currently studying Corporate Finance.?

Book equity or book value of equity per share is one factor that investors can use to determine whether a stock is undervalued, this metric should not be used by itself as it only presents a very limited view of the firm's situation.

It can be calulated as the ratio of equity value and number of shares outstanding.
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You need to look in the ledgers and take Assets minus Liabilities. This will leave you with a company's Book Value for Equity.
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