Question

Ashok and Sandeep invested Rs 18000 each in buying shares of two different companies, Ashok buys 7.5%. Rs 100 share at a discount of 20%, whereas Sandeep buys Rs 50 share at a premium of 20%. If both receive equal dividend at the end of the year, then find the rate of dividend received by Sandeep.

Answer 1

For Ashok

Sum invested = Rs 18000

N.V of each share = Rs 100

M.V of each share = Rs 100 - 20% of Rs 100 = Rs 80

No. of shares bought = $\frac{Rs.18000}{Rs.80}=225$

Dividend on 1 share = 7.5% of Rs 100 = 27.5

Total dividend received = 225 $\times$ Rs.7.50 = Rs. 1687.50

For Sandeep

Sum invested = Rs 18000

N.V of each share = Rs 50

M.V of each share = Rs 50+20% of Rs 50 = Rs 60

No. of share bought $=\frac{Rs.18000}{Rs.60}=300$

Now it is given that Ashok and Sandeep receive equal dividend

Total dividend received by Sandeep = Total dividend received by Ashok.

= 1687.50

Dividend on 300 shares = Rs 1687.50

dividend on each share $=\frac{Rs.1687.50}{300}=Rs.\frac{45}{8}$

Since N.V of each share = Rs 50

on Rs 50 dividend $=Rs.\frac{45}{8}$

Rate of dividend $=\frac{45}{8\times 50}\times 100\%=11.25\%$