Question

On which amount is brokerage always calculated?

Options

• Dividend received on shares

• Face Value (FV) of shares

• Total investment made by the investor

• Market Value (MV) of shares

Answer 1

Brokerage is always calculated on the Market Value (MV) of shares. Using \[ \text{Brokerage} = \frac{\text{Rate of brokerage}}{100} \times \text{Market Value} \] the rate of brokerage is applied to MV, not to face value or dividend.