Question

Prashant bought 50 shares of FV Rs.100, having MV Rs.180. Company gave 40% dividend on the shares. Find the rate of return on investment.

Answer 1

Here, Number of shares = 50, FV = Rs.100, MV = Rs.180, rate of dividend = 40% 

∴ Sum invested = Number of shares × MV 

= 50 × 180 

= Rs.9000 

Dividend per share = 40% of FV 

= (40/100) × 100 

Dividend = Rs.40 

∴ Total dividend on 50 shares 

= 50 × 40 

= Rs. 2000

Now. rate of Return = (Total invidend) / (Sum invested) x 

=(2000/9000) x 100

= 22.2%

∴ Rate of return on investment is 22.2%