Question

Two brothers A and B invest Rs. 16,000 each in buying shares of two companies. A buys 3% hundred-rupee shares at 80 and B buys ten-rupee shares at par. If they both receive equal dividend at the end of the year, find the rate percent of the dividend received by B.

Answer 1

For A

Total investment = Rs. 16,000

Nominal value of 1 share = Rs. 100

Market value of 1 share = Rs. 80

∴ No of shares purchased = `(16,000)/80` = 200 shares

Nominal value of 200 shares = Rs. 100 × 200 = Rs. 20,000

Dividend% = 3%

Dividend = 3% of Rs. 20,000

= `3/100 xx Rs. 20,000`

= Rs. 600

For B

Total investment = Rs. 16,000

Nominal value of 1 share = Rs. 10

Market value of 1 share = Rs. 10

∴ No of shares purchased = `(16,000)/10` = 1600 shares

Nominal value of 1600 shares = 10 × 1600 = Rs. 16,000

Dividend received by B = Dividend received by A = Rs. 600

Dividend% = `"Dividend"/"Nominal value" xx 100%`

= `600/(16,000) xx 100%`

= 3.75%