Question

a man buys 20 shares (par value Rs 10)of a company which pays 9% dividend at such price that he gets 12% on his money.find the market value of the share?
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Answer 1

Answer:

A buys 20 shares , each shares 10 Rs.

20 share value = 20 × 10 = 200 Rs.

9% dividend = (109/100) ×200 = 218 Rs.

then he gets 12% = (112/100) × 218

then total share value = 244.16 Rs

Starting share value =200

Market share value = 244.16 Rs.

Therefore

present each share value = 244.16 / 20

each share value = 12.208 Rs.