Question

If 40 shares of FV ₹80 were purchased for MV ₹100, and the company declared 25% dividend on shares, then the return $\left(\%\right)$ is.

• A. $30\%$
• B. $18\%$
• C. $20\%$
• D. $25\%$

Answer 1

The correct option is C $20\%$

Sum invested
= Number of shares $\times$ MV
= 40 $\times$100
= ₹4000

Dividend per share = FV $\times \frac{25}{100}$
= 80 $\times \frac{25}{100}$
= ₹20
Total Dividend received for 40 shares = 40 $\times$ 20
= ₹800

Return $\left(\%\right)$ $=\frac{\text{Dividend income}}{\text{Sum invested}}\times 100$

$=\frac{800}{4000}\times 100$

$=20\%$