Question

100 shares of FV Rupees 10 were purchased for MV Rupees 25. Company declared 20% dividend on the shares. Find (i) the sum invested(ii) dividend received (ii) rate of return.

Answer 1

Correct Answer - (i) The sum invested is Rupees 2500.
(ii) Dividend received is Rupees 200.
(iii) Rate of return is 8%.
FV = Rupees, MV = Rupees 25, Number of shares = 100
(i) The sum invested =MV xx number of shares
`= Rupees 25 xx 10= Rupees 250`
(ii) Dividend per share = FV `xx` rate of dividend
`= Rupees 10 xx ( 20)/( 100) = Rupees 2`
`:.` total dividend received = dividend per share `xx` number of shares
`= Rupees 2 xx 100 = Rupees 200`
(iii) Rate of return `= ( "dividend income ")/( "the sum invested") xx 100 = ( 200)/( 2500) xx 100 = 8%`