A dividend of $9 %$ was declared on a share of $F V R s 100$ at a certain price. If the rate of return is $7.5 %$ , calculate $M V$ of the share. How many shares would a person get on investing $R s 8400$ ?

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Solution

dividend = 9%
Face value = Rs 100 = FV
return = 7.5 % = r%
(i) **FV * d% = MV * r%**
100 * 9 = MV * 7.5
==> Market value = 900 / 7.5 = Rs 120
(ii)dividend = Rs 630
dividend % = 7.5 %
Sum invested = 630/7.5 * 100 = Rs 8,400

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