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Question
How much should a man invest in Rs. 50 shares selling at Rs. 60 to obtain an income of Rs. 450, if the rate of dividend declared is 10%. Also find his yield percent, to the nearest whole number.
Sum
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Solution
Face value of each share = Rs. 50
Dividend(%) = 10%
Dividend on 1 share = `10/100 xx 50` = Rs .5
∴ Number of shares bought = `"Total dividend"/"Dividend per share"`
= `450/5`
= 90
Market value of each share = Rs. 60
∴ Total investment = 90 × 60 = Rs. 5400
Percentage return = `"Total dividend"/"Total investment" xx 100`
= `450/5400 xx 100`
= 8.33%
= 8%
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