Sum
By investing Rs 7,500 in a company paying 10 per cent dividend, an annual income of Rs 500 is received. What price is paid for each of Rs 100 share?
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Solution
Total investment = ₹ 7,500
Nominal value of 1 share = ₹ 100
No. of shares purchased = y
Nominal value of y shares = 100 x y = ₹ (100y)
Dividend% = 10%
Dividend = Rs 500
∴ 10% of 100y = Rs 500
`=> 10/100 xx 100"y" = "Rs" 500`
`=> "y" = 500/10 = 50 "shares"`
∴ market Value of 1 shares = `7500/50 = "Rs" 150`
Concept: Shares and Dividends
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