Question

Market value of shares and dividend declared by the two companies is given below. Face Value is same and it is Rupees 100 for both the shares. Investment in which company is more profitable ?
(1) Company A - Rupees132 , 12%
(2) Company B - Rupees144, 16%

Answer 1

Answer:

Investment in company B is more profitable

Step-by-step explanation:

Let Say Amount Invested in Each share Was =  1584C   Rs

Company A share Bought = 1584C/132  = 12C

Company A Dividend per Share = (12/100) * 100 = 12

Dividend Received = 12C * 12 = 144C

Company B Share Bought = 1584C/144  = 11C

Company B Dividend per Share = (16/100) * 100 = 16

Dividend Received = 11C * 16 = 176C

176C > 144C

Dividend from Company B is more than Dividend for Company A for Equal investments

hence Investment in company B is more profitable

Answer 2

Step-by-step explanation:

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