Mathematics

₹100 shares of a company are sold at a discount of ₹20. If the return on the investment is 15%. Find the rate of dividend declared.

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Let Rate of Dividend be x%

Dividend on 1 share of ₹100 = x% of ₹100 = ₹x

Since the shares are sold at a discount of ₹20,
Market Value of 1 share = ₹100 - ₹20 = ₹80

$\% \text{Return} = \Big(\dfrac{\text{Annual Inc.}}{\text{Investment}} \times 100\Big)\% \\[0.5em]$

As per the given,

$15 = \dfrac{x}{80} \times 100 \\[0.5em] x = \dfrac{15 \times 80}{100} \\[0.5em] x = 12$

∴ Rate of Dividend = 12%

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