Question

A company declared 6% half-yearly dividend. If a person has 175 shares at par value of Rs. 25 each, what will he receive as yearly dividend?

Answer 1

Step 1: Given information:

Nominal value or par value of the share is $\mathrm{Rs}.25$
Half-yearly dividend$=6\%$

Number of shares$=175$

Step 2: Calculate yearly dividend:
Rate of yearly dividend$=2\times 6=12\%$.
$\begin{array}{rcl}\mathrm{Yearly}\mathrm{dividend}& =& \mathrm{number}\mathrm{of}\mathrm{shares}\times \mathrm{face}\mathrm{value}\times \mathrm{rate}\mathrm{of}\mathrm{devidend}\\ & =& 175\mathrm{x}25\mathrm{x}\frac{12}{100}\\ & =& \mathrm{Rs}.525\end{array}$

$\begin{array}{rcl}\therefore \mathrm{Yearly}\mathrm{dividend}& =& \mathrm{Rs}.525\end{array}$

Hence, the person will receive the amount of $\mathrm{Rs}.525$ as yearly dividend.