Question

Assume that you have just purchased some shares in an investment company reporting $500 million in assets, $50 million in liabilities, and 50 million shares outstanding. What is the net asset value (NAV) of these shares

Answer 1

Answer:

The correct answer is $9 million.

Explanation:

According to the scenario, the given data are as follows:

Assets = $500 million

Liabilities = $50 million

Outstanding shares = 50 million

So, we can calculate the NAV by using following formula:

NAV = Net Assets ÷ Outstanding no. of share

Where, Net assets = Assets - Liabilities = $500 - $50 = $450 million

By putting this in formula, we get:

NAV = $450 ÷ 50

= $9 million