#### Question

A dividend of 10% was declared on shares with a face value of Rs. 60. If the rate of return is

12%, calculate:

(i) The market value of the share.

(ii) The amount to be invested to get an annual income of Rs. 1,200.

#### Solution

(i) Dividend% = 10% Face value = Rs. 60

Dividend = 10% of Rs. 60

= `10/100`×𝑅s. 60 = 𝑅s. 6

Let market value = Rs. y

Return% = 12%

12% of Rs (y) = Rs. 6

⇒ `12/100`×𝑦= 𝑅s. 6

⇒ y = Rs. 50

(ii) When income is Rs. 6, then investment is Rs. 50 When income is Rs. 1,200, then investment

= `50/6 ×𝑅s. 1,200

= Rs. 10,000

Is there an error in this question or solution?

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A Dividend of 10% Was Declared on Shares with a Face Value of Rs. 60. If the Rate of Return is 12%, Calculate: (I) the Market Value of the Share. (Ii) the Amount to Be Invested to Get an Annual Incom Concept: Shares and Dividends.

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