Mathematics

At what price should a 10%, ₹ 25 share be quoted when money is worth 8%?

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Given,

Face Value = ₹ 25

Dividend Rate = 10%

Return percentage = 8%

Let M.V. be ₹ x.

By formula,

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

$\therefore \dfrac{10}{100} \times 25 = \dfrac{8}{100} \times x \\[1em] \Rightarrow x = \dfrac{250}{8}\\[1em] \Rightarrow x = ₹ 31.25.$

Hence, the share should be quoted at ₹ 31.25.

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