Aditya holds 300 shares of R's 10 each. The company issues bonus shares in the ratio 3:5. The company declared a dividend of 25% on the charged capital. What is the average rate of return on his investment?
Answers
Answer:
Aditya gets 3:5 bonus shares on 300 shares.
Step-by-step explanation:
So his holding becomes 60% more or 300+180
480 shares.
Face Value of(his)this holding is480*10=₹4800
He gets 25% dividend on 480 shares or ₹ 1200
But his investment was 300 sh x ₹10=₹3000
and he gets ₹1200 as dividend.
So his rate of return
=(1200/3000)*100
= 40% ANSWER.
Given : Aditya holds 300 equity shares of Rs.10 each of the company.
The company issues bonus shares in the ratio of 5:3.
The company declared a dividend of 25% on enlarged capital.
To Find : Average rate of return on his investment
Solution:
Aditya holds 300 equity shares of Rs.10 each of the company.
=> Amount invested = 300 x 10 = Rs 3000
The company issues bonus shares in the ratio of 5:3.
Bonus share = ( 3/5) * 300 = 180
Total share = 300 + 180 = 480
A dividend of 25% on enlarged capital.
Dividend per share = (25/100)10 =2.5 Rs
Dividend per share = 2.5 Rs
Total Shares = 480
Dividend = 480 x 2.5
= 1200 Rs
Aditya receive 1200 Rs as dividend on investment of Rs 3000
average rate of return on his investment = (1200/3000) * 100
= 40 %
average rate of return on his investment is 40%
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