Question

Mohan holds 480 shares of a company and receives an annual dividend of Rs. 960. If the dividend he receives be 8% per annum, find the face value of share.

Answer 1

Step 1:

Given information:

Number of shares$=480$

Annual dividend$=\mathrm{Rs}.960$

Rate of dividend$=8\%\mathrm{per}\mathrm{annum}$

Step 2:

Calculating face value of share:

Let face value of share is $\mathrm{Rs}.x$

So, the face value of 480 shares$=480\times x=\mathrm{Rs}.480x$

According to the question,

$$\begin{gathered} \mathrm{Total}\mathrm{dividend}=\mathrm{Rate}\mathrm{of}\mathrm{dividend}\times \mathrm{Face}\mathrm{value}\mathrm{of}480\mathrm{shares} \\ \Rightarrow 960=8\%\mathrm{of}480x \\ \Rightarrow 960=480x\times \frac{8}{100} \\ \Rightarrow x=\frac{960\times 100}{480\times 8} \\ \therefore x=\mathrm{Rs}.25 \end{gathered}$$

Hence, the face value of one share is Rs.25.