Problem 4-20 City Street Fund has a portfolio of $500 million and liabilities of $40 million

Accounting Jan 24, 2021

Problem 4-20 City Street Fund has a portfolio of $500 million and liabilities of $40 million. If there are 20 million shares outstanding, what is net asset value? (Round your answer to 2 decimal places.) Net asset value per share

Expert Solution

Net asset value is the total assets minus total liabilities and then dividing the net value by total outstanding units

We can put the same in formula as

Net asset value= (Total assets value - Total liability value)/ Total no of units outstanding

Now putting the values in formula, we get net asset value

Net asset value = ($500 - $40)/20

=$23.00 per share

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