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Rate of Return

Aman purchase...

Question

Aman purchased a share of FV ₹200 for MV of ₹240. Company declared 12% Dividend on the share. Find the rate of return.

A

12.5%

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B

15%

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C

10%

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D

8.75%

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Solution

The correct option is C 10%
FV = ₹200 , MV = ₹240, Dividend = 12% per share.
Let the rate of return be x%.
Aman got a return of ₹24 on investment of ₹240.
$∴ \frac{12}{240} = \frac{x}{200}$
$\Rightarrow x = \frac{200 \times 12}{240}$
$\Rightarrow x = 10 %$

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