Question

Shubendhu owns 560 shares of a company. The face value of each share is ₹25. The company declares a dividend of $9\%$. Calculate:

(i) The dividend that Shubendhu will get.

(ii) The rate of interest on his investment if Shubendhu had paid ₹30 for each share.

• A. i) ₹1260, ii) 8.5$\%$
• B. i ) ₹1360, ii) 7.5$\%$
• C. i) ₹1260, ii) 7.5$\%$
• D. i) ₹1360, ii) 8.5$\%$

Answer 1

The correct option is C

i) ₹1260, ii) 7.5$\%$

No. of shares = 560,

Nominal Value of one share = ₹25

Rate of dividend = $9\%$.

(i) Dividend per share = $9\%$ of ₹25 = $\frac{9}{100}$ $\times$ ₹.25 = ₹ $\frac{9}{4}$.

Dividend for 560 shares = 560 $\times$ ₹ $\frac{9}{4}$ = ₹1260.

(ii) Investment = No. of shares $\times$ Market value of one share

= 560 $\times$ ₹30 = ₹16800.

Rate of interest on investment = $\frac{Dividend}{Investment}$ $\times$ 100

= $\frac{1260}{16800}$ $\times$ 100 = 7.5%.