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Question
Two brothers A and B invest Rs. 16,000 each in buying shares of two companies. A buys 3% hundred-rupee shares at 80 and B buys ten-rupee shares at par. If they both receive equal dividend at the end of the year, find the rate percent of the dividend received by B.
Solution
For A
Total investment = Rs. 16,000
Nominal value of 1 share = Rs. 100
Market value of 1 share = Rs. 80
∴ No of shares purchased = `(16,000)/80` = 200 shares
Nominal value of 200 shares = Rs. 100 × 200 = Rs. 20,000
Dividend% = 3%
Dividend = 3% of Rs. 20,000
= `3/100 xx Rs. 20,000`
= Rs. 600
For B
Total investment = Rs. 16,000
Nominal value of 1 share = Rs. 10
Market value of 1 share = Rs. 10
∴ No of shares purchased = `(16,000)/10` = 1600 shares
Nominal value of 1600 shares = 10 × 1600 = Rs. 16,000
Dividend received by B = Dividend received by A = Rs. 600
Dividend% = `"Dividend"/"Nominal value" xx 100%`
= `600/(16,000) xx 100%`
= 3.75%
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