If an investment company originally issued 0.5 million shares for $30, then issued a further 0.1 million shares for $40, and its portfolio of investments now has a market value of $27 million and a book value of $19 million, what is its net asset value (NAV)?
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An investment company sells shares in itself, and uses the proceeds to invest in a portfolio of individual investments such as stocks and bonds. The NAV is equal to the net value of the investment company's assets divided by the number of its shares outstanding. In this question the NAV is equal to $27 million / (500,000 +
100,000) = $45.