Question

At what price should a 6.5% rs 100 share be a quoted when the money is worth 5%

Answer 1

Answer:

Dividend = 6.25%

Nominal Value = ₹100

Return = 5%

We have to find M.V.

First find the dividend(Income) on 1 share → 6.25% of ₹100( N.V.) = ₹6.25

Now use the formula → Return% = Income or Dividend / Investment * 100

5 = 6.25/M.V. * 100

So, M.V. = 6.25 / 5 * 100 = ₹125