𝐇𝐨𝐰 𝐝𝐨 𝐲𝐨𝐮 𝐤𝐧𝐨𝐰 𝐢𝐟 𝐚 𝐬𝐭𝐨𝐜𝐤 𝐢𝐬 𝐰𝐨𝐫𝐭𝐡 𝐛𝐮𝐲𝐢𝐧𝐠 𝐚𝐬 𝐚 𝐟𝐮𝐧𝐝 𝐦𝐚𝐧𝐚𝐠𝐞𝐫 / 𝐩𝐫𝐢𝐯𝐚𝐭𝐞 𝐛𝐚𝐧𝐤𝐞𝐫?
➡️Net Asset Value(NAV) = subtracts total liabilities from the total assets of a company
➡️Appearance:
For funds, the net asset value represents the actual value of the fund,
and NAV is usually calculated in units of each stock.
➡️For
example: Company A’s NAV per share is in one dollar, then, shareholders
could get $1 for each share. The formula is NAV/Number of ordinary
shares. In theory, when the company sells its assets and pays off its
liabilities, the rest would be given to the shareholders.
➡️Since
the stocks of listed companies can be traded freely, their stock prices
can be higher or lower than the NAV per share. If the stock price is
lower than NAV, the stock is worth buying.
➡️However, in actual application, we have to consider the profit prospects of the company!
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