Question

A company has capital of Rs. 10,00,000 made up of Rs. 10 shares. A dividend of Rs. 50,000 was declared at the end of the year to be distributed among the shareholders. Find the dividend by Govind holding 300 shares.

Answer 1

Step 1:

Given information:

Capital$=\mathrm{Rs}.10,00000$

Value of one share $=\mathrm{Rs}.10$

Dividend declared$=\mathrm{Rs}.50,000$

Number of shares Govind hold$=300$

Step 2:

Calculate dividend received by Govind:

Calculate rate of dividend.

$$\begin{gathered} \mathrm{Rate}\mathrm{of}\mathrm{dividend}=\frac{\mathrm{Amount}\mathrm{of}\mathrm{dividend}}{\mathrm{Total}\mathrm{par}\mathrm{value}}\times 100 \\ \Rightarrow \mathrm{Rate}\mathrm{of}\mathrm{dividend}=\frac{50,000}{10,00000}\times 100 \\ \Rightarrow \mathrm{Rate}\mathrm{of}\mathrm{dividend}=5\% \end{gathered}$$

Total par value of 300 shares$=300\times 10=\mathrm{Rs}.3,000$

Thus, the dividend received by Govind is computed as,

$$\begin{gathered} \mathrm{Dividend}=5\%\mathrm{of}3,000 \\ \Rightarrow \mathrm{Dividend}=3,000\times \frac{5}{100} \\ \therefore \mathrm{Dividend}=\mathrm{Rs}.150 \end{gathered}$$

Hence, the dividend received by Govind is Rs. 150.