Question

The face value of a share is Rs 100. Aakash purchased 25 shares when it's market value was Rs 70.In the year , the company declared 20% dividend.Find the rate of return Aakash got on his investment

Answer 1

Face value or Present value of a share= Rs 100

Number of shares bought by Aakash , when Price of each share was Rs 70=  25

Total amount that was contributed to shares = 70 × 25= Rs 1750

Present price of 25 shares = 100 × 25= Rs 2500

Dividend Provided = 20 %

Profit that is Amount or Reward got by Aakash in a share =20 % of 100=20

So, Now Present Worth of 25 shares = (100+20) × 25= Rs 3,000

Amount that Aakash got as a profit on his investment = Rs 3,000 - Rs 1,750= Rs 1,250

Rate of Return = $\frac{1250}{3000}\times 100= 41.67$%  

Answer 2

Answer:

The rate of return Aakash got on his intesment =28.57%

Step-by-step explanation:

Sum invested = no.of shares

(MV) =25(70)

       =rs1750

total dividend = 20(25)

                       = rs 500 rate of return

                       = total dividend / sum invested (100)

                       =28.57%

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