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Question
Ajay owns 560 shares of a company. The face value of each share is Rs. 25. The company declares a dividend of 9%. Calculate:
(i) The dividend that Ajay will get.
(ii) The rate of interest on his investment, if Ajay had paid Rs. 30 for each share.
Solution
No . of shares = 560
N.V. of one share = ₹ 25
Rate of dividend = 9%
(i) Dividend = No. of shares x N.V. x Rate of divdend.
= 560 x 25 x `(9)/(100)`
= ₹ 1,260
(ii) Investment = No. of shares x M.V.
= 560 x 30
= ₹ 16,800
∴ Rate of interest on investment = `"Dividend"/"Investment" xx 100`
= `(1,260)/(16,800) xx 100`
= 7.5%.
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