M/s. Wealth Builders, an Asset Management Company (AMC), launched a dividend bonus scheme on 1 st April 2019. The fund demonstrated strong…

CA Final · Advanced Financial Management · PYQS · January 2026
M/s. Wealth Builders, an Asset Management Company (AMC), launched a dividend bonus scheme on 1 st April 2019. The fund demonstrated strong performance over the years. Key events are as follows: On 30 th September 2021, the fund declared a bonus of 1:4 (one bonus unit for every four existing units held).On 30 th September 2023, a second bonus of 2: 5 (two bonus units for every five existing units held) was declared. Ms. Investor made a lump-sum investment of 25 lakhs in the scheme at its inception and remained invested throughout. As of 31 st March 2025, her investment has generated an average annual yield of 16.8%. The Net Asset Value (NAV) of the scheme on various dates is provided below: Particulars 30.09.2021 30.09.2023 31.03.2025 NAV (in ₹) 78 88 110 Required: Determine the opening NAV per unit as on 1 st April 2019 for Ms. Investor's holding. ("Round off all intermediate and final calculations to two decimal places.")

Suggested Answer and Working Notes:

(a) Average Yield 0.168 (b) Investment 25,00,000 (c) Gain over a period of 6 years (a*b*6) 25,20,000 (d) Market Value as on 31.03.2025 (b + c) 50,20,000 (e) NAV as on 31.03.2023 110 (f) Total units as on 31.03.2025 (d/e) 45636.36 (g) No of units as on 31.03.2023 Pre bonus = 45636.36*5/ (5 + 2) 32597.40 (h) No of units as on 31.09.2019 Pre bonus = 32597.40*4/ (4 + 1) 26077.92 Issue Price as on 01.04.2019 Investment - 25,00,000/ Units purchased 26077.92 (b/h) = 95.87 Alternatively, it can also be computed as follows: Units on 01.04.2019 X Units after bonus on 30.09.2021 (1:4) 1.25X Units after bonus on 30.09.2023 (2:5) 1.75X Average yield 0.168 Investment 25,00,000 Gain for 5 years (25,00,000 x 0.168 x 6) 25,20,000 Total Value (₹ 25,00,000 +25,20,000) 50,20,000 Where, 1.75X x 110 = 50,20,000 Therefore, X = 26077.92 units Issue Price on 01.04.2019: = 25,00,000 / 26077.92 units = 95.87 Alternatively, it can also be computed as follows: Average Yield = 16.80% Investment = 25,00,000 Gain over a period of 6 years = 25,00,000*0.168*6 = 25,20,000 Thus, Maturity Value on 31.03.25 shall be - 50,20,000 No. of units = 50,20,000 / 110 = 45,636.36 Now let B be the NAV on 01.04.19 then Units acquired on 01.04.19 = 25,00,000 / B Units added on 30.09.21 = (25,00,000 / B) x (1 / 4) = 6,25,000 / B Units added on 31.12.23 = (31,25,000 / B) x (2 / 5) = 12,50,000 / B Thus, total units can be shown as follows: [2500000 / B] + [625000 / B] + [1250000 / B] = 45,636.36 B = 95.87 Thus, the issue Price of units under Bonus Plan shall be 95.87.

Topics: Mutual Fund

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