Question

Prasad purchased a share of face value Rs. 100 when its market price was Rs. 150. Company declared a dividend of 12% on the share. What was the rate of return on the investment Prasad made ? 

Answer 1

F. V. = Rs. 100, M. V. = Rs. 150, Dividend = 12%
Let rate of return = x %
If Rs. 150 are invested,
the returns are Rs. 12  

∴ `12/150=x/100` 

`x=(12xx100)/150=8` 

∴ The rate of return is 8 %.