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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 the rate of dividend received by Sandeep is ___


A

11.25%

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B

12.25%

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C

11%

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D

12%

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Solution

The correct option is A

11.25%


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 = Rs.18000Rs.80=225

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

Total dividend received = 225 × 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 =Rs.18000Rs.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 =Rs.1687.50300=Rs.458

Since N.V of each share = Rs 50

on Rs 50 dividend =Rs.458

Rate of dividend =458×50×100%=11.25%


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