Question

The composition of the Fingroup Fund portfolio is as follows:

Stock	Shares	Price
A	270,000	$	30
B	370,000		35
C	470,000		10
D	670,000		15

The fund has not borrowed any funds, but its accrued management fee with the portfolio manager currently totals $50,000. There are 5 million shares outstanding. What is the net asset value of the fund? (Round your answer to 2 decimal places.)

Net asset value            $

Answer 1

Final answer

Net assets value = 7.15

Explanation

Stock	Shares	Price	Amount
A	270,000	30	8100000
B	370,000	35	12950000
C	470,000	10	4700000
D	670,000	15	10050000
Total Market value of fund			35800000
(-) Outstanding Fee			50,000
Net assets value of fund			35,750,000
Number of shares			5,000,000
Net asset value per share			7.15

The term net assets means net assets per share. For computing the net assets value of fund, we have to calculate the market value of each stock and added them. Thus we get 35,800,000 as the total market value of fund. Out of this the amount of any liabilities had to be deducted. Hence out standing management fee of 50,000 is deducted to calculate the final net asset value of fund = 35,750,000.

Finally fund is represented by 5,000,000 shares. So to calculate the Net asset value per share we divide the net asset value of fund by 5,000,000 shares.

Thus Net asset value per share = 35,750,000 / 5,000,000 = 7.15.