Question

50 shares of face value ₹ 10 were purchased for market value of ₹ 25. Company declared 30% dividend on the shares, then find:

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

Answer 1

Given:

FV = ₹10

MV = ₹25

Number of shares = 50

Rate of dividend = 30%

1. Sum invested = No. of shares × MV

Sum invested = 50 × 25

= ₹1250

Sum invested = ₹1250

2. Dividend received,

`"Dividend" = ("Rate of dividend")/100 xx "FV"`

= `30/100 xx 10`

= ₹3

Total dividend = No. of shares × Dividend

= 50 × 3

= ₹150

Dividend received = ₹150

3. Rate of return,

Rate of return = `"Dividend"/"Sum invested" xx 100`

= `150/1250 xx 100`

= `1500/125`

= 12%

Rate of dividend = 12%