Question

Prasad purchased a share of face value Rs. 100 when its market price

was Rs. 150. Company declared a dividend of 12% on the share. What

was the rate of return on the investment Prasad made ?

Answer 1

FV = 100
MV = 150
d% = 12%
No of shares = 1

Investment= 150
Annual divided=FV× d%×no of shares
=100×12/100×1
= 12
Rate of return= annual divided/investment ×100
12/150×100
RATE OF RETURN = 8%




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Answer 2

Solution :-

Given,

F.V = 100 RS

M.V = 150 RS

Dividend = 12%

let rate of return = X%

if RS 150 are invested, the return are RS 12

12/150 = X/100

X= 12×100 / 150

X = 120 /15

X = 8%

The rate of return is 8%

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