Question

If $50$ shares of FV $Rs.10$ were purchased for MV of $Rs.25$. Company declared $30$% dividend on the shares then find (1) Sum investment (2) Dividend received (3) Rate of return.

Answer 1

$FV=Rs.10,MV=Rs.25$, Number of shares $=50$
(1) $\therefore$ Sum investemtn $=25\times 50=Rs.1250$.
(2) Dividend per share $=10\times \frac{30}{100}=Rs.3$
$\therefore$ Total dividend received $=50\times 3=Rs.150$.
(3) Rate of return $=\frac{\text{Dividend income}}{\text{Sum invested}}\times 100$
$=\frac{150}{1250}\times 100=12$%.