Question

Mr. Harisha has purchased 150 shares of FV ₹100 , for MV ₹140. Company has paid dividend at 8%. Find the rate of return on his investment.

• A. 5.71%
• B. 5.56%
• C. 5.02%
• D. 6.2%

Answer 1

The correct option is A 5.71%

Sum invested
= Number of shares $\times$ MV
= 150 $\times$140
= ₹21000
Dividend per share
= $FV\times \frac{8}{100}$
= $100\times \frac{8}{100}$
= ₹8
Total Dividend received for 150 shares
= 150 $\times$ 8
= ₹1200
Rate of return
= $\frac{Dividendincome}{Suminvested}\times 100$
= $\frac{1200}{21000}\times 100$
= 5.71%