Mathematics
A man buys 400, twenty-rupee shares at a discount of 20% and receives a return of 12% on his money. Calculate :
(i) the amount invested by him
(ii) the rate of dividend paid by the company.
Shares & Dividends
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Answer
(i) Market value = ₹ 20 - ₹ = ₹ 20 - ₹ 4 = ₹ 16.
Amount invested = 400 × ₹ 16 = ₹ 6,400
Hence, amount invested = ₹ 6,400.
(ii) Let rate of dividend be x%.
Rate of dividend × N.V. = Profit (return) % × M.V.
Hence, rate of dividend = 9.6%.
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