Question

Which is better investment 16% of 2100 shares at Rs.80 or 20% Rs.100 shares at

Rs.120.​

Answer 1

Step-by-step explanation:

1st case

16% Rs.2100shares at 80 means;

Market value of 1 share = Rs. 80

Nominal value of 1 share = Rs. 2100

Dividend = 16%

Income on Rs. 80 = 16% of Rs. 100 = Rs. 16

Income on Rs. 1 = 16/80=Rs.0.20

2nd case

20% Rs. 100 shares at 120 means;

Market value of 1 share = Rs. 120

Nominal value of 1 share = Rs. 100

Dividend = 20%

Income on Rs. 120 = 20% of Rs. 100 = Rs. 20 Income on Rs. 1 = 20/120=Rs.0.17

Then 16% Rs. 2100 shares at 80 is better investment.