Question

Shubendhu owns 560 shares of a company. The face value of each share is Rs. 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 Rs. 30 for each share.

• A. i) Rs. 1260, ii) 8.5%
• B. i) Rs. 1360, ii) 7.5%
• C. i) Rs. 1260, ii) 7.5%
• D. i) Rs. 1360, ii) 8.5%

Answer 1

The correct option is C

i) Rs. 1260, ii) 7.5%

No. of shares = 560,

Nominal Value of one share = Rs. 25,

Rate of dividend = $9\%$.

(i) Dividend per share = $9\%$ of Rs. 25 = 9/100 $\times$ Rs.25 = Rs. 9/4.

Dividend for 560 shares = 560 $\times$ Rs. 9/4 = Rs. 1260.

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

= 560 $\times$ Rs. 30 = Rs. 16800.

Rate of interest on investment = (Dividend / Investment) $\times$ 100

= (1260/16800) $\times$ 100 = 7.5%.