Question

Ramesh had bought $90$ shares of the company at $Rs.150$ per share. Calculate the dividend he receives and the percentage of return on his investment.

Answer 1

number of shares Ramesh bought=90

Nominal value of each share=Rs.100

Rate of dividend=8%

$\therefore$The dividend received by the Ramesh$=8\%of100\times 90$

$\Rightarrow \frac{8}{100}\times 100\times 90=Rs.720$

$\%return=\frac{Income}{investment}\times 100$

Income=No. of share$\times$rate of dividend$\times$Nominal value

$\Rightarrow Income=90\times \frac{8}{100}\times 100=Rs.720$

Investment=No.of share$\times$market value of 1 share

$\Rightarrow Investment=90\times 150=Rs.13500$

$\therefore \%Return=\frac{720}{13500}\times 100=5\frac{1}{3}$%