Question

Shri Shivajirao has purchased 150 shares of F.V. ₹ 100, for M.V. of ₹ 120. Company has paid 7% dividend. Find the rate of return on his investment.

Answer 1

F.V. = ₹ 100, M.V. = ₹ 120, Number of shares purchased = 150.

Dividend 7%

Total investment = Number of shares × M.V.

= 150 × 120

= ₹ 18000

Dividend = Number of shares × F.V. × Rate of dividend

= `150 xx 100 xx 7/100`

= ₹ 1050

Rate of return = `"Dividend income"/"Sum invested" xx 100`

= `1050/18000 xx 100`

= `105/18`

= `35/6`

= 5.83%

The rate of return for Shri Shivajrao is 5.83% on his investment.