  Question

# A dividend of 13 % was declared on ₹ 100 shares selling at a certain price. If the rate of return is 6.5 % ,calculate  (i) the market value of the shares (ii) the amount to be invested  to obtain an annual dividend of ₹ 3900 i) ₹ 100  (ii) ₹ 30,000 i) ₹ 150  (ii) ₹ 40,000 i) ₹ 500  (ii) ₹ 50,000 i) ₹ 200  (ii) ₹ 60,000

Solution

## The correct option is D i) ₹ 200  (ii) ₹ 60,000 Given that Dividend = 13 % ; N.V = ₹ 100;  Rate of return = 6.5 %  M.V x Rate of Return = Dividend % x  N.V M.V  × 6. 5 % = 13 % ×  100 M.V  × 6.5100  = 13100 ×  100                           M.V               = 136.5 ×  100                                                 = ₹ 200 ii) Dividend % = 13 % ; N.V = 100 Hence dividend on one share = ₹ 13   To obtain an annual income of ₹ 3900;  We know Annual Income = Dividend on one share x Number of shares                   3900  =  13 x Number of shares Number of shares = 650013                                = 300 M.V of one share = ₹ 200  and number of shares = 300 Hence he will have to invest 200 x 300 = ₹ 60,000  Suggest corrections   