Question

Find the annual dividend on 500 shares of a stock with par value of Rs. 10 each, if the quarterly dividend is 16%.

Answer 1

Step 1:

Given information:

Nominal value of 1 share$=\mathrm{Rs}.10$
Quarterly dividend$=16\%$

Number of shares$=500$

Step 2:

Calculate annual dividend:
$\begin{array}{rcl}\mathrm{Yearly}\mathrm{dividend}& =& \left(\mathrm{Nominal}\mathrm{value}\mathrm{of}500\mathrm{shares}\times \mathrm{Quarterly}\mathrm{dividend}\right)\times 4\\ & =& \left(500\mathrm{x}10\mathrm{x}\frac{16}{100}\right)\times 4\\ \therefore \mathrm{Yearly}\mathrm{dividend}& =& \mathrm{Rs}.3,200\end{array}$

Hence, the annual dividend is $\mathrm{Rs}.3,200$.