Two companies have shares of 7% at ₹116 and 9% at ₹145 respectively. In which of the shares would the investment be more profitable? (Assume face value of ₹100)

Assuming nominal value per share to be ₹100 in both cases.

In the first case:

Income on ₹116 = 7% of ₹100 = ₹7

$\therefore \text{ Income on ₹1} = ₹\dfrac{7}{116}$

In the second case:

Income on ₹145 = 9% of ₹100 = ₹9

$\therefore \text{ Income on ₹1} = ₹\dfrac{9}{145}$

Now,

$\dfrac{7}{116} = \dfrac{7 \times 5}{116 \times 5} = \dfrac{35}{580} \\[0.7em] \dfrac{9}{145} = \dfrac{9 \times 4}{145 \times 4} = \dfrac{36}{580}$

Since 35 < 36, therefore investment in second case (i.e. 9% at ₹145) is more profitable than the investment in first case.