A) Given the Following Information, Calculate the Net Tangible Asset

question 12

Essay

a) Given the following information, calculate the net tangible asset (NTA) price per unit of the "Futuristic Office Property Fund" which is an A-REIT.
Market value of property held by the fund is $80,000,000; the mortgage owed to lenders is $50,000,000; and the number of units issued to the public is 20,000,000.
b) The market price of the fund is currently trading at a discount of 10% to the answer derived in part a) of this question. Calculate this market price and discuss why a price different to the NTA may occur for an A-REIT.

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Definitions:

Unemployment Rate

The share of people in the labor force who have no job but are searching for one.

Business Confidence

An economic indicator that measures the degree of optimism or pessimism that business managers feel about the prospects of their companies and the economy as a whole.

Natural Rate

The unchanging rate of unemployment in the economy that occurs due to the frictional and structural factors when the labor market is in equilibrium.

Inflation Rate

The percentage increase in the general level of prices for goods and services in an economy over a period, typically measured annually.