KnowledgeBoat Logo
|

Mathematics

Assertion (A): Investing in 12% of the ₹ 100 shares at ₹ 150 means, an investment of ₹ 100 gives an annual income of ₹ 12.

Reason (R): Annual income of an investor depends upon the face value of the share.

  1. Both A and R are true, and R is the correct explanation of A.

  2. Both A and R are true, but R is not the correct explanation of A.

  3. A is true, but R is false.

  4. A is false, but R is true.

Shares & Dividends

2 Likes

Answer

Given,

Face value = ₹ 100

Market value = ₹ 150

Dividend rate = 12%

By formula,

Annual income = No. of shares × Rate of div. × N.V. of 1 share

Annual income from one share=1×12100×100=12\text{Annual income from one share} = 1 \times \dfrac{12}{100} \times 100 = ₹12

However, the investment was ₹ 150 (the market price), not ₹ 100.

So, an investment of ₹100 does not give ₹ 12 in income — ₹ 12 is earned on ₹ 150.

∴ Assertion (A) is false.

By formula,

Annual income = No. of shares × Rate of div. × N.V. of 1 share

This means the income does depend on the face value, not the market value.

∴ Reason (R) is true.

Hence, Option 4 is the correct option.

Answered By

2 Likes


Related Questions