Question

calculate which of the following investment is more profitable Company A:fv=₹80,Mv?=₹70, dividend 16% Company B:Fv=₹90,MV=₹100, divided 18%​

Answer 1

Answer:

u can refer to the given example

Step-by-step explanation:

Let the face value of each share be Rs x.

Market value of each share of company A = Rs 80

Dividend = 16%

Rate of return from company A = Dividend incomeSum invested×100%=16100×x80×100%=x5%

Market value of each share of company B = Rs 120

Dividend = 20%

Rate of return from company B = Dividend incomeSum invested×100%=20100×x120×100%=x6%

∴ Rate of return from company A > Rate of return from company B

Thus, the investment in company A is more profitable.

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