Suppose the RedRock mutual fund holds the following long positions: Shares/Company 72,500 shares of Microsoft (MSFT)...

Suppose the RedRock mutual fund holds the following long positions: Shares/Company 72,500 shares of Microsoft (MSFT) 42,300 shares of Archer Daniels Midland (ADM) 18,320 shares of Abercrombie & Fitch (ANF) 32,000 shares of Merck (MRK) 19,000 shares of Wal-Mart (WMT) 56,400 shares of Research in Motion (RIMM) 12,500 shares of Garmin (GRMN) 15,000 shares of Goldman Sachs (GS) Current Price $25.57 $29.52 $47.06 $34.47 $53.77 $55.92 $29.36 $164.89 The fund has liabilities of $425,819 and shares outstanding equal 1,354,887. If this is the total portfolio, what is the Net Asset Value (NAV) per share?

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Expert Solution

Net Asset Value (NAV) per share

Company	Number of shares	Market price per share ($)	Market Value ($)

Microsoft (MSFT)	72,500	25.57	18,53,825.00
Archer Daniels Midland (ADM)	42,300	29.52	12,48,696.00
Abercrombie & Fitch (ANF)	18,320	47.06	8,62,139.20
Merck (MRK)	32,000	34.47	11,03,040.00
Wal-Mart (WMT)	19,000	53.77	10,21,630.00
Research in Motion (RIMM)	56,400	55.92	31,53,888.00
Garmin (GRMN)	12,500	29.36	3,67,000.00
Goldman Sachs (GS)	15,000	164.89	24,73,350.00

TOTAL			1,20,83,568.20

Net Asset Value (NAV) per share = [Total Market Value of shares – Liabilities] / Number of shares outstanding

= [$1,20,83,568.20 - $425,819] / 13,54,887 Shares outstanding

= $1,16,57,749.20 / 13,54,887 Shares outstanding

= $8.60 per share

“Hence, the Net Asset Value (NAV) per share would be $8.60 per share”

jeff jeffy answered 8 months ago

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