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Question

A dividend of 12% was declared on Rs 100 share selling at a certain price . If the rate of return is 15% then amount which needs to be invested to obtain annual dividend of Rs 1440 will be


A

Rs 14400

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B

Rs 1200

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C

Rs 9600

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D

Rs 4800

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Solution

The correct option is C

Rs 9600


Rate of return × M.V = Rate of dividend × N.V

15100×M.V=12100×100

M.V of share = Rs 80

Annual income on 1 share 12% of Rs 100

=12100×100=Rs.12

No. of share to be bought =Total annual incomeAnnual income of 1 share

No. of share bought =Rs.1440Rs.12=120

Amount invested = M.V of share × No of share bought

=80×120=Rs.9600


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