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Mathematics

A company declared a dividend of 14%. Find the market value of ₹50 shares if the return on the investment was 10%.

Shares & Dividends

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Answer

Let the market value of 1 share be ₹x

Dividend on 1 share of ₹50 = 14% of ₹50 = ₹7

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

As per the given,

10=7x×100x=7×10010x=7010 = \dfrac{7}{x} \times 100 \\[0.5em] x = \dfrac{7 \times 100}{10} \\[0.5em] x = 70

∴ Market Value of each ₹50 share = ₹70

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