Question

12. A dividend of 9% was declared on Rs 100 shares selling at a certain price in the stock market. If the
rate of return is 7.5%, calculate
(i) the market price of each share, and
(ii) the amount to be invested to obtain an annual dividend of Rs 630.
​

Answer 1

Answer:  

rs 120 AND RS 8400

Step-by-step explanation:

dividend = 9%

Face value = Rs 100 = FV

return = 7.5 % = r%

(i) FV * d% = MV * r%

100 * 9 = MV * 7.5

==> Market value = 900 / 7.5 = Rs 120

(ii)dividend = Rs 630

dividend % = 7.5 %

Sum invested = 630/7.5 * 100 = Rs 8,400

Answer 2

Answer:

sol. 8400 is the answer