Question

If 40 shares of FV ₹80 were purchased for MV ₹100, and the company declared 25% dividend on shares, find the Rate of return.

• A. 30%
• B. 25%
• C. 20%
• D. 18%

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
Rate of return = $\frac{Dividendincome}{Suminvested}\times 100$
= $\frac{800}{4000}\times 100$
= 20%