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Question
A man buys 75, Rs. 100 shares of a company which pays 9 per cent dividend. He buys shares at such a price that he gets 12 per cent of his money. At what price did he buy the shares?
Solution
Nominal value of 1 share = Rs. 100
Nominal value of 75 shares = 100 × 75 = Rs. 7500
Dividend% = 9%
∴ Dividend = 9% of Rs. 7500
=
= Rs. 675
Let market price of 1 share = Rs. y
Then market price of 75 shares = Rs. 75y
Profit% on investment = 12%
12% of 75y = Rs. 675
=
= Rs. 675
y = Rs. 75
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