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Mathematics

Hundred rupee shares of a company are available in the market at a premium of ₹ 20. Find the rate of dividend given by the company when a man's return on his investment is 15 percent.

Shares & Dividends

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Answer

We know that,

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

Market value = ₹ 100 + ₹ 20 = ₹ 120.

Let rate of dividend be x%

x100×100=15100×120x=18%.\Rightarrow \dfrac{x}{100} \times 100 = \dfrac{15}{100} \times 120 \\[1em] \Rightarrow x = 18\%.

Hence, rate of dividend = 18%.

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