Question

The market value of a 10.5% stock, in which an income of Rs. 756 is derived by investing Rs. 9000, brokerage being 1/4%, is:
A.Rs. 108.25
B.Rs. 112.20
C.Rs. 124.75
D.Rs. 125.25

Answer 1

Answer:

Option c) Rs. 124.75

Step-by-step explanation:

Let us assume the face value to be Rs. 100

Since it is 10.5 % in stock, Dividend is 10.5 per share

And it is given that investment made is Rs. 9000.

So,

For earning a dividend of Rs.10.5 the investment needed is:

Dividend × Investment / Income

⇒ 10.5 × 9000 / 756

⇒ 10.5 × 11.90 ≈ Rs. 125

Brokerage amount = Rs. 0.25

⇒ Market Value = 125 - 0.5 = Rs. 124.75