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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.
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Solution
Since Dividend on 1 share 10% of Rs. 50 = `10/100 xx Rs 50 = Rs 5`
∴ Number of shares bought = `"Total dividend"/"Dividend on 1 share" = "Rs. 450"/"Rs 5" = 90`
Since market value of each share Rs. 60
∴ Sum invested by the man = 90 x Rs 60 = Rs 5400
Percentage return = `"Total return"/"Sum invested" xx 100% = (Rs 450)/(Rs 5400) xx 100% = 8.33% = 8%`
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