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Mathematics

A company declares 8% dividend on ₹ 100 shares. Atul buys such shares and gets 10% return on his investment. At what price does he buy each share?

Shares & Dividends

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Answer

Given,

Face Value = ₹ 100

Dividend Rate = 8%

Return percentage = 10%

Let M.V. be ₹ x.

By formula,

Rate of dividend × N.V. = Profit (return) % × M.V.

∴8100×100=10100×x⇒8×100=10x⇒x=80010⇒x=₹ 80.\therefore \dfrac{8}{100} \times 100 = \dfrac{10}{100} \times x \\[1em] \Rightarrow 8 \times 100 = 10x \\[1em] \Rightarrow x = \dfrac{800}{10}\\[1em] \Rightarrow x =₹\ 80.

Hence, Atul buys each share at ₹ 80.

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