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Question
Ajay owns 560 shares of a company. The face value of each share is Rs. 25. The company declares a dividend of 9%.
Calculate:
- The dividend that Ajay will get.
- The rate of interest on his investment, if Ajay had paid Rs. 30 for each share.
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Solution
No. of shares = 560
N.V. of one share = ₹ 25
Rate of dividend = 9%
i. Dividend = No. of shares × N.V. × Rate of dividend
= `560 xx 25 xx 9/100`
= ₹ 1,260
ii. Investment = No. of shares × M.V.
= 560 × 30
= ₹ 16,800
∴ Rate of interest on investment = `"Dividend"/"Investment" xx 100`
= `(1,260)/(16,800) xx 100`
= 7.5%
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