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Question
A 6% share yields 8%. Find the market value of a Rs 100 share.
Solution
Given that,
Face value of the share = ₹ 100
Dividend = 6%
Yield = 8%
Annual income on the share = `6/100 xx 100`
= ₹ 6
`"Yield" = "Annual income"/"Market value" xx 100`
∴ 8 = `6/"Market value" xx 100`
∴ Market value = `600/8`
= ₹ 75
∴ Market value of the share = ₹ 75
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