Question

Hundred rupees FV of share of a company has MV rupees 120. the company declared 9% dividend. What is the rate of return

Answer 1

Rate of return is 7.5%

Step-by-step explanation:

Face Value (FV) of a share = 100 Rs.

Market Value (MV) of a share = 120 Rs.

Investment = MV × number of shares

                  = 120 × 1 = 120 Rs.

Dividend = 9% of FV

              = 0.09 × 100

              = 9 Rs.

Rate of return = $\frac{income}{investment}\times 100$

                       = $\frac{9}{120}\times 100$

                       = 7.5%

Rate of return is 7.5%

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