Question

Shree shantilal has purchased $150$ shares of $FVRs100$, for $MV$ of $Rs120$. Company has paid dividend at $7\%$. Find the rate of return on his investment.

Answer 1

Shantilal investment $=150\times 120$

(No. of shares $\times$ MV) = $Rs.18,000$

Dividend per share $=7\%$ of $100$

$=\frac{7}{100}\times 100$

$=7$

Total dividend $=7\times 150$

$=Rs.1050$

Rate of return $=\frac{1050}{18,000}\times 100=5.83$

$\therefore$ rate of return will be $5.83\%$.