Question

Market value of shares and dividend declared by two companies is given below. face value of both shares is same and it is 100 rs.investment in which company is more profitable??
1) company a-mv= 132 rs 12% dividend
2)company b mv=144 rs, 16% dividend​

Answer 1

Answer:

$\huge\boxed{\boxed{\red{Company\:B}}}$

Step-by-step explanation:

Company A

Market value = Rs 132 .

Face value = Rs 100

Dividend = 12 %

Let the investment be x .

We know that number of shares = investment/market value .

n = Rs 132/x

Dividend = n × r × f / 100

⇒ 132/x × 12 × 100/100

⇒ 132/x × 12

Company B

Market value = Rs 144

Face value = Rs 100

Dividend = 16 %

Let the investment be x .

We know that number of shares = investment/market value .

n = Rs 144/x

Dividend = n × r × f / 100

⇒ 144/x × 16 × 100/100

⇒ 144/x × 16

Now comparison between A and B

Company A

132/x × 12

⇒ 1584/x

Company B

⇒ 144/x × 16

⇒ 2304/x

Obviously 2304/x > 1584/x

Hence Company B is more profitable .

Answer 2

Solution :

Company 1 :-

Market Value = Rs. 132

Face Value = Rs. 100

Dividend = 12%

Now , Assuming the investment as 'y'

We know that ,

Number of Shares = Investment/Market Value

N = Rs. 132/ y

Then ,

Dividend = n × r × f /100

=> 132/y × 12 × 100/100

=> 132/y × 12

Company B :-

Market Value = Rs. 144

Face Value = Rs. 100

Dividend = 16%

Now , Assuming the investment as 'z'

n = 144/z

Dividend = n × r × f/100

=> 144/z × 16 × 100/100

=> 144/z × 16

Now , comparing both a and b :-

Company A = 132/y × 12

=> 1584/y

Company B = 144/z × 16

=> 2304/z

So , 2304 > 1584.

Hence ,

Company B is more Profitable.