To compute book value per share, we need to refer to the balance sheet, which has a shareholders (or stockholders) equity section. The computation of book value is done through the following formula: Shareholders equity minus Total value of equity claims that are senior to common stock is equal to Common shareholders equity. After this, Common shareholders equity is divided by the number of common shares outstanding to get the Book value per share. Possible claims senior to the claims of common stock, which would be subtracted from shareholders’ equity, include the value of preferred stock and the dividends in arrears on preferred stock (Jerald E. Pinto, 2020).