Question

By investing ₹ 11440 in a company paying 10% dividend, an annual income of ₹ 520 is received. What is the market value of each ₹ 50 share?

Answer 1

Given:

Investment = ₹ 11,440

Dividend rate = 10% per annum

Face value of each share = ₹ 50

Step-wise calculation:

1. Let market value of one ₹ 50 share = x (₹).

2. Number of shares bought = `(11440)/x`.

3. Dividend (income) per share

= 10% of ₹ 50

= ₹ 5

4. Total annual income

= `(11440)/x xx 5` 

= `(57200)/x`

5. Set total annual income = ₹ 520:

`(57200)/x = 520`

⇒ `x = (57200)/520`

⇒ x = 110

The market value of each ₹ 50 share is ₹ 110.