Question

A man buys 75, Rs. 100 shares of a company which pays 9 per cent dividend. He buys shares at such a price that he gets 12 per cent of his money. At what price did he buy the shares?

Answer 1

Nominal value of 1 share = Rs. 100

Nominal value of 75 shares = 100 × 75 = Rs. 7500

Dividend% = 9%

∴ Dividend = 9% of Rs. 7500

= `9/100 xx 7500`

= Rs. 675

Let market price of 1 share = Rs. y

Then market price of 75 shares = Rs. 75y

Profit% on investment  = 12%

12% of 75y  = Rs. 675

= `12/100 xx 75y`

= Rs. 675

y = Rs. 75