500, ₹ 50 shares at par earn a dividend of ₹ 1250 in one year. The rate of dividend is :

1. 10%

2. 7.5%

3. 12.5%

4. 5%

Given,

N.V. = ₹ 50

No. of shares = 500

Dividend = ₹ 1250

By formula,

Dividend = No. of shares × Rate of dividend × N.V. of share

Let rate of dividend be x%.

Substituting values we get :

$\Rightarrow 1250 = 500 \times x\% \times 50 \\[1em] \Rightarrow 1250 = 500 \times \dfrac{x}{100} \times 50 \\[1em] \Rightarrow x = \dfrac{1250 \times 100}{500 \times 50} \\[1em] \Rightarrow x = \dfrac{125000}{25000} \\[1em] \Rightarrow x = 5.$

Rate of dividend = 5%.

Hence, Option 4 is the correct option.