Question

A man invests a sum of money in Rs.100 shares, paying 15%
dividend, quoted at 20% premium. If his annual dividend is
Rs.540, calculate :
(i) His total investment.
(ii) The rate of return on his investment.​

Answer 1

(i) His total investment is ₹4320.

(ii) The rate of return is 12.5%

Step-by-step explanation:

Nominal value of each share = 100 Rs.

Dividend on one share = 15% × 100

                                      = 15 Rs.

Let the number of purchased shares =n

Number of shares × dividend per share = annual dividend

n × 15 = 540

15n = 540

n = 36

(i) His total investment = Number of shares × Market value of per share

Market value of one share = 100 +(20% ×100)

                                            = 100 + 20

                                            = 120 Rs.

His total investment = 120 × 36 = 4,320 Rs.

(ii) Rate of return on his investment = $\frac{income}{investment}\times 100$

                                                         = $\frac{540}{4320}\times 100$

                                                         = 12.5%

The rate of return is 12.5%

Learn more dividend and rate of return : https://brainly.in/question/7948430

Answer 2

Answer:

this is the correct answer