Question

₹ 25 shares of a company are selling at ₹ 20. If the company is paying a dividend of 12%, then the rate of return is

Options

• 10%

• 12%

• 15%

• 18%

Answer 1

F.V. of each share = ₹ 25,
M.V. = ₹ 20
Rate of dividend = 12%

DIvidend on each share = `(12)/(100) xx 25` = ₹ 3
Return on ₹ 20 = ₹ 3

and on ₹ 100 = ₹ `(3)/(20) xx (5)/(100)` = 15%.