Question

50 shares of face value ₹ 10 were purchased for market value of ₹ 25. Company declared 30% dividend on the shares, then find:

1. Sum invested
2. Dividend received
3. Rate of return.

Answer 1

Given:

FV = ₹ 10

MV = ₹ 25

Number of shares = 50

Rate of dividend = 30%

1. Sum invested = No. of shares × MV

Sum invested = 50 × 25

= ₹ 1250

Sum invested = ₹ 1250

2. Dividend received

`"Dividend" = ("Rate of dividend")/100 xx "FV"`

= `30/100 xx 10`

= ₹ 3

Total dividend = No. of shares × Dividend

= 50 × 3

= ₹ 150

Dividend received = ₹ 150

3. Rate of return

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

= `150/1250 xx 100`

= `1500/125`

= 12%

Rate of return = 12%