Question

1. Ajay, an investor bought an equity share whose face value is Rs.10 for Rs.250 and earned 50% dividend in year 1, 60% dividend in year 2, and sold it off after three years for Rs.300. What is the return on his investment?

Answer 1

Face value of share = $\rm ₹10$

Market value of share = $\rm ₹250$

$\therefore$ Total amount invested = $\rm 60 \times 50 = Rs. 3000$

Dividend = 60%

$\therefore$ Total divided on 50shares = $\rm 60 \times 50 = ₹3000$

Now,

Rate of return = $\tt \frac{total \: dividend}{sum \: invested} \times 100$

$\tt = \frac{3000}{60} \times 100$

$\tt = 50\%$

Then,

We get 50%