#### Question

A company, with 10,000 shares of Rs 100 each, declares an annual dividend of 5%.

(1) What is the total amount of dividend paid by the company?

(2) What should be the annual income of a man who has 72 shares in the company?

(3) If he received only 4% of his investment, find the price he paid for each share

#### Solution

Nominal value of 1 share = Rs 100

Nominal value of 10,000 shares = 10,000 x Rs 100 = Rs 10,00,000

1) Dividend% = 5%

`= 5/100 xx 10,00,000 = "Rs" 50,000`

2) Nominal value of 72 shares= Rs 100 x 72 = Rs 7,200

Dividend = 5% of Rs 7,200

`= 5/100 xx 7200 = "Rs" 360`

3) Let market value of 1 share = Rs y

Then market value of 10000 shares = Rs 10000y

Return% = 4%

then 4% of Rs 10000y = Rs 50000

`=> 4/100 xx 10,000"y" = "Rs" 50,000`

`=> "y" = "Rs" 125`

Is there an error in this question or solution?

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A Company, with 10,000 Shares of Rs 100 Each, Declares an Annual Dividend of 5%. (1) What is the Total Amount of Dividend Paid by the Company? (2) What Should Be the Annual Income of a Man Who Ha Concept: Shares and Dividends.

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