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Biebers Ltd has a statement of financial position which lists R1400 000 000 in assets. R900...

Biebers Ltd has a statement of financial position which lists R1400 000 000 in assets. R900 000 000

In ordinary shareholders equity. It has 10 000 000 ordinary shares outstanding. The replacement cost of

Its assets is R1 700 000 000. Its share price in the market is R49. Its book value per share is ?

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Answer #1

Sol. Book Value Per Share = Shareholders Equity / No. of Shares outstanding

= (Total Assets - Total Liabilities) / No. of shares outstanding

= (1400,000,000 - 500,000,000) / 10,000,000

= 900,000,000 / 10,000,000

= R 90

WN.1 - Total Liabilities = Assets - Shareholders equity = 1400,000,000 - 900,000,000 = R 500,000,000

WN.2 - In calculation of book value per share the assets value needs to be taken is of value in books and not market value/replacement cost. As the replacement cost is taken while calculating market value per share.

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