Question

Assertion (A) : A man invests ₹4600 in ₹100 shares, paying 10% dividend and quoted at 15% premium. His annual dividend from these shares is ₹400.

Reason (R) : Number of shares held by a person = $$\frac{\text{Total market value}}{\text{Face value of 1 share}}$$

Options

• Both A and R are true, and R is the correct explanation of A.

• Both A and R are true, but R is not the correct explanation of A.

• A is true, but R is false.

• A is false, but R is true.

Answer 1

A is true, but R is false.

Explanation:

Step 1 – Assertion: A is true. A 15% premium makes the market value per share ₹115, so the number of shares bought and the annual dividend are:

$$\text{Number of shares} = \frac{4600}{115} = 40$$

$$\text{Annual dividend} = 40 \times 100 \times \frac{10}{100} = ₹400$$

Step 2 – Reason: R is false. The number of shares is found by dividing the total investment by the market value of one share, not by the face value.