Question

100 shares are bought at ₹ 60 per share and the dividend received is ₹ 600.

Statement (1): Rate of return × ₹ 60 × 100 = ₹ 600 

Statement (2): Rate of return × Market value = Dividend received on each share.

Options

• Both the statements are true.

• Both the statements are false.

• Statement 1 is true, and statement 2 is false.

• Statement 1 is false, and statement 2 is true.

Answer 1

Both the statements are true.

Explanation:

Number of shares bought = 100

Price per share = ₹ 60

Total dividend received = ₹ 600

Rate of return = `"Annual income​"/"Investment"`

= `"Annual income​"/("No. shares" xx "Price per share")`

⇒ Rate of return = `600/(100 × 60)`

⇒ Rate of return × 60 × 100 = 600

So, statement 1 is true.

Rate of return = `"Annual income​"/("No. shares" xx "Price per share")`

⇒ Rate of return × Price per share = `"Annual income​"/"No. shares"`

⇒ Rate of return × Market value = Dividend received on each share

So, statement 2 is true.

Hence, option 1 is correct.