Question

If 50 shares of FV Rs. 20 were purchased for MV of Rs. 30. Company declared 30% dividend on the shares then find 

1. Sum invested 
2. Dividend received 
3. Rate of return

Answer 1

Given:

Number of shares = 50

Face value (FV) per share = Rs. 20

Market value (MV) per share = Rs. 30

Dividend declared = 30% (on FV)

Step-wise calculation:

1. Sum invested = Number of shares × MV

= 50 × 30

= Rs. 1,500

2. Dividend per share = FV × 30%

= 20 × 0.30

= Rs. 6

Total dividend received = 50 × 6

= Rs. 300

3. Rate of return = `("Dividend income")/("Sum invested") xx 100` 

= `(300/1500) xx 100` 

= 20%