Mathematics

At what price should a 9% ₹100 share be quoted when the money is worth 6%?

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Let the market value of 1 share be ₹x

Dividend on 1 share of ₹100 = 9% of ₹100 = ₹9

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

As per the given,

$6 = \dfrac{9}{x} \times 100 \\[0.5em] x = \dfrac{9 \times 100}{6} \\[0.5em] x = 150$

∴ 9% ₹100 share should be quoted at ₹150

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