Question

A company with 10,000 shares of 100/- each declared an annual dividend of 5%
i) what is the total amount of dividend paid by the company
ii) what would be the annual income of a man who holds 72 shares in the company
iii) If he recieved only 4% on his investment find the price he paid for each share.

I got the first two parts of the question, I dont know how to solve the third part. The answer is given as rupees 125 but I don't know hoe to get that


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Answer 1

Answer:

Nominal value of 1 share = Rs. 100 Nominal value of 10,000 shares = 10,000 × Rs. 100 = Rs. 10,00,000 (i) Dividend% = 5% Dividend = 5% of Rs. 10,00,000 = (5/100) × Rs.10,00,000 = Rs. 50,000 (ii) Nominal value of 72 shares = Rs. 100 × 72 = Rs. 7,200 Dividend = 5% of Rs. 7,200 = (5/100) × Rs.7,200 = Rs. 360 (iii) Let market value of 1 share = Rs y Then market value of 10,000 shares = Rs. (10,000y) Return% = 4% 4% of Rs. (10,000y) = Rs. 50,000 ⟹ (4/100) ×10,000 = Rs.50,000 ⟹ y = Rs. 125.

Step-by-step explanation: