Mathematics

By investing ₹7500 in a company paying 10 percent dividend, an income of ₹500 is received. What price is paid for each ₹100 share.

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Let the number of shares purchased be x.

Nominal Value per share = ₹100

Rate of Dividend = 10%

Total Investment = ₹7500

Annual Dividend = ₹500

Annual Dividend = No. of shares x Rate of Dividend x Nominal Value per share

According to the given,

$500 = x \times \dfrac{10}{100} \times 100 \\[0.5em] 500 = 10x \\[0.5em] x = \dfrac{500}{10} \\[0.5em] x = 50$

∴ Number of shares purchased = 50

Market value of each share

$= \dfrac{\text{Total Investment}}{\text{No. of shares}} \\[0.7em] = \dfrac{7500}{50} \\[0.5em] = \bold{₹150}$

∴ Price paid for each share = ₹150

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