Question

Murali holds 300 shares of Rs20 each. The company issues shares in the ratio 3:5. The company declared a dividend of 15 % on the and enlarged capital. What is the average rate of return on his investment?​

Answer 1

Step-by-step explanation:

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Answer 2

Answer:

The average rate of return on investment = Rs 135

Step-by-step explanation:

• The company issued bonus shares in the ratio of 3:5.

• It means for every 3 shares you have, you will receive 5 shares as bonus shares.
• So for 300 shares you will recieve 500 additional shares.

• Now the company offered a dividend of 15% on capital.

Original capital = (No. of shares) × (value of 1 share)

Here,

• No. of shares = 15% of 300 = 45

• Value of one share = Rs 20

∴ Original capital = 45 × 20 = 900

Now,

dividend = 15% on capital

divident = 15% of 900  = 135

∴ The average rate of return on investment = Rs 135