Equals to the book value of a company divided by the number of shares outstanding.
Book value is a good way of judging if the stock market value is reasonable compared to company's true value. Market value is usually higher than the book value. A good indication of safer investment is if the stocks market capitalization is close to the book value.
Market value is what the investment community's expectations are and book value is based on costs and retained earnings.
For example, if the market value is more than twice of the book value, company might be overvalued. However, buying a stock based only on a book value is not recommended. As always, other things need to be considered, such as: earnings, economic conditions, etc.
A thing to remember is that during bull markets the stock price is more likely to trade much higher than book value, and in a bear market the two value's may be much closer.
