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Question
Karan buys 125 shares of Rs 100 each of 'Reliance Technologies Ltd.' which pays a dividend of 6%. He buys them at such a price that he gets 4% of his money. At what price did Karan buy the share?
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Solution
Let Karan's investment be x.
Face value of 125 shares = Rs ( 100 x 125) = Rs 12,500
Dividend for 125 shares = 6 % of 12,500J = Rs `(6 xx 12500)/100` = Rs 750
He gets Rs 750 as dividend which is equal to 4°/o of money invested
⇒ `(4 x)/100` = Rs 750
⇒ 4 x = Rs 75000
⇒ x = Rs `75000/4`
⇒ x = Rs 18750
Hence, Karan invested Rs 18,750.
No. of shares bought by Karan = 125
Value of a share = Rs `18750/125` = Rs 150
Karan bought a share for Rs 150.
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