EQUITY VALUATION:

Net asset value: Net asset value (NAV) represents a fund's per share market value.

NAV= Total assets-total liabilities/total outstanding shares

=280-103.4/120

=1.47
Dividend discount model:

Zero growth model:

Vo=D1+P1/1+Ke

Where,

D1= Dividend expected to be paid at the end of the year

P1=Price expected at the end of the year or market price

Ke=required rate of the return or equity capitalization rate or cost of equity

Example:

D1=2.15 P1=50 Ke=? Vo=59.77

59.77=2.15+50/1+ke

Constant growth model:

Vo=D1/ke-g

Variable growth model

Expected to pay dividend=7 per share

B=0.01

Rp=6.5%

Market return=10.5%

Current market price=225 per share