Ankit had the option of investing in company A, where 7% ₹ 100 shares are available at ₹ 120 or in company B, where 8%, ₹ 1000 shares are available at ₹ 1620.
Statement (1) : Investment in company B is better than company A.
Statement (2) : Yield % of company B is better than in company A.
Both the statements are true.
Both the statements are false.
Statement 1 is true, and statement 2 is false.
Statement 1 is false, and statement 2 is true.

Question

Ankit had the option of investing in company A, where 7% ₹ 100 shares are available at ₹ 120 or in company B, where 8%, ₹ 1000 shares are available at ₹ 1620.
Statement (1) : Investment in company B is better than company A.
Statement (2) : Yield % of company B is better than in company A.
Both the statements are true.
Both the statements are false.
Statement 1 is true, and statement 2 is false.
Statement 1 is false, and statement 2 is true.

KnowledgeBoat · Accepted Answer

For company A : Dividend = 7% N.V. = ₹ 100 M.V = ₹ 120 Dividend per share = 7% of N.V. = = ₹ 7 ⇒ Rate of return = = = 5.83% For company B : Dividend = 8% N.V. = ₹ 1000 M.V = ₹ 1620 Dividend per share = 8% of N.V. = = ₹ 80 ⇒ Rate of return = = = 4.94% Investment in company B is better than A. This is false, because A gives higher yield. So, statement 1 is false. Yield of company B is better than A. Company A gives better return that is 5.83%. So, statement 2 is false. Hence, option 2 is correct.

Mathematics

Shares & Dividends

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