Mathematics
Quotation of the share of a company is as follows "10% ₹ 120 shares at ₹ 1.200".
Assertion (A): The company is in profit.
Reason (R): The above share is at premium.
Assertion (A) is true, but Reason (R) is false.
Assertion (A) is false, but Reason (R) is true.
Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct reason for Assertion (A).
Both Assertion (A) and Reason (R) are correct, and Reason (R) is incorrect reason for Assertion (A).
Shares & Dividends
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Answer
"10% ₹ 120 shares at ₹ 1,200"
Here's what this means:
Face value of share = ₹ 120
Dividend rate = 10% of face value = ₹ 12 dividend per share
Market price = ₹ 1,200 (i.e., each share is being sold at ₹ 1,200)
So the share is selling at a premium of ₹ 1,200 − ₹ 120 = ₹ 1,080.
So, reason (R) is true.
The company is in profit if it distributes dividends, which is indicated by the 10% dividend rate in the share quotation.
So, assertion (A) is true.
Thus, both Assertion (A) and Reason (R) are correct, and Reason (R) is incorrect reason for Assertion (A).
Hence, option 4 is the correct option.
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