Question

Shirin purchased a share of FV ₹ 100 for MV ₹ 120. If the rate of return for Shirin is 12.5%. Find the dividend declared by the company.

Answer 1

If the rate of return for Shirin is 12.5%, then the dividend declared by the company is 15%.

Step-by-step explanation:

The face value of the share purchased by Shirin = Rs. 100

The market value of the share i.e., Investment = Rs. 120

The rate of return for Shirin = 12.5%

Let the dividend on the share be Rs. “x”.

Now, we know from the formula that,

The rate of investment = $\frac{Dividend}{Investment}$ * 100

Substituting the given values, we get

12.5 = $\frac{x}{120}$ * 100

⇒ x = Rs. 15

Thus,  

The rate of dividend declared by the company is given by,

= $\frac{Dividend}{Face Value}$ * 100

= $\frac{15}{100}$ * 100

= 15%

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Answer 2

Answer:

Step-by-step explanation: