Net Asset Valuation Part Four, Liabilities, Equity and Final Calcs. Having completed the asset side, it's time to move to the liability section, and the first thing we're going to value is the total debt. We are taking the debt from the last fiscal year, which in this case is historical year zero. I have a market value adjustment assumption here similar to the balance sheet assets. We can apply this in any situation where there might be a gap between the book value and the market value. In this case, what I'm showing here is that there are occasions where the book value of debt perhaps is overvalued or undervalued depending on where the market has moved. And this is very important for REITs because of how reliant they are on debt financing. So I have an assumption here saying that the debt is actually more valuable than it was on the books. And so the market value of the debt is going to be the adjustment factor times the book value. Now the next thing we have to consider is the total debt of the equity investments. Now, in a traditional corporate, when corporate has an equity stake in a company it is an equity stake in the sense that it is effectively a residual ownership. With real estate investing, it's slightly different, because typically when they're co-owners of a building, there still has to be financing provided and the financing is jointly shared, usually along the lines of the percentages of the investment levels. So in this case, for this particular REIT ARMCO, they have equity investments which we've established up top, and they also have debt associated with those equity building investments. This particular amount can be found in the financials. If you're modeling a REIT, you wanna look under the equity investment section and find out how much debt is associated with those buildings that are co or jointly owned. Now we have to remember that that number is not the number that is going to apply to the REIT. That number needs to be adjusted by its ownership level and we have an ownership level assumption up here, 50%. So we're going to apply that to the total debt of the equity investments, and we can determine how much debt is owned by this particular REIT. Now, current liabilities and other liabilities, we're going to handle similarly to the operating assets and that we will link them at 100%. For the redeemable NCI, again, I'm going to link to the balance sheet balance as of the last historical year. Now with the redeemable NCI, it can go one of three ways. It can be converted into equity. It can be exercised and converted into cash, or it can be left alone. I'm choosing to leave it alone. Whichever is chosen, you have to remember not to double count. So if we convert it to cash, we have to remove the NCI here and adjust the cash or the payable that would go to the operating unit shareholders. If we convert it to equity, we would have to zero this out and convert this into actual shares at the equity level. Since I'm leaving it alone, this is the only thing we need to do with this account. For the NCI, the traditional NCI, I'm also simply going to link to the last historical or fiscal year, and now I can sum the total claims on the assets.

The net asset value, therefore, is the total market value of the assets less the total market value of the liabilities and other claims on the assets. In fact, I will just (keys clicking) tighten up that label. We calculated our diluted shares up top, so we can now compute our net asset value per share. The current share price is $152 71. The net asset value per share is $189.72. If we take the NAV per share and divide it by the current share and then subtract one we get the premium or discount to the current share price, and that completes the net asset valuation.