Question

A company declares a semi-annual dividend of 5%. Daniel has 400 shares of the company. If Daniel’s annual income from the shares is Rs. 1000, find the face value of each share.

Answer 1

Given that,

Semi-annual dividend = 5%

∴ Annual dividend = 10%

Number of shares with Daniel = 400

Daniel’s annual income from the shares = ₹ 1000

∴ Annual income from one share = `1000/400`

= ₹ 2.5

But annual income from one share

= `"Annual dividend"/100 xx "Face value"`

∴ `2.5 = 10/100 xx "Face value of the share"`

∴ Face value of the share = ₹ 25