Question

Ayush buys a share of FV ₹ 200 for MV of ₹ 250. A company confirmed 20% dividend on the share. What will be the rate of return?

Options

• 16%

• 15%

• 20%

• 5%

Answer 1

16%

Given: FV = ₹ 200

MV = ₹ 250

Dividend = 20%

Let the rate of return be x%.

We know, `("FV" xx "Dividend")/("MV")` = Rate of return

⇒ `x = (20 xx 200)/250`

⇒ x = 16%