Amit bought 24 shares of FV 100 by investing 3000,8% dividend was declaredon shares. Find (1) the MV of the share (2) dividend received (3) the rate of returnon investment.
Answers
Answer:
(1) Rs.125
(2) Rs.192
(3) 6.4%
Step-by-step explanation:
No. of shares = 24
Face value of shares = Rs.100
Investment = Rs.3000
Dividend (per cent) = 8
Amit invested Rs.3000 to purchase 24 shares from the market
=> Market Value (MV) of each share = 3000/24 = 125
(1) MV of share is Rs.125
Dividend is paid on face value. The rate of dividend = 8%.
Dividend per share = Dividend Rate (%) * FV
= (8/100)*100 = 8
Dividend earned per share = Rs.8
Dividend earned on 24 shares = Rs.192
(2) Dividend received on the entire investment = Rs.192
Rate of return on investment (%) = 100*(Returns on investment/Total investment)
(Returns on investment are in the form of dividends)
Total investment made = Rs.3000
Returns on investment = Dividend received on investment = Rs.192
=> Rate of return on investment = (192/3000)*100 = 0.064*100 = 6.4%
(3) Rate of return on investment = 6.4%
We can also work on rate of return on investment (%) as:
100*(Dividend per share/MP per share)
= 100*(8/124)
= 100*(0.064)
= 6.4
Rate of return on investment = 6.4%