Question

Mr Amol purchase 50 shares of face value rupees hundred when the market value of share was 80% company at given 20% dividend find the rate of return on the on investment

Answer 1

No of shares = 50
FV= 100
MV=80
d%=20%

Investment = No of shares × MV
= 50 × 80
= 4000
Annual income = FV × d × No of shares
= 100×20/100× 50
=₹1000

return = Annual divided/ Investment × 100
= 1000/4000 × 100
=25%


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Answer 2

Given,No of shares=50
N.V=Rs. 100
M.V=80%of N.V
=Rs.80
rate of dividend=20%
We know ,
M.V×rate of return=N.V×rate of dividend
$80 \times \frac{x}{100} = 100 \times \frac{20}{100 } \\ x = \frac{20 \times 10}{8} \\ x = 25$
therefore rate of dividend=25%