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Question
A company declared a dividend of 14%. Find tire market value of Rs. 50 shares if the return on the investment was 10%.
Solution
Rate of dividend = 14%
Dividend on Rs. 50 = `(14 xx 50)/(100)` = Rs 7
Now Rs. 10 is interest on the investment of
= Rs. 100
Rs. 7 will be the interest on
= `(100 xx 7)/(10)` = Rs. 70
Hence Market value of Rs. 50 shares = Rs. 70.
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