Question

    Rahul bought 100 shares of Reliance for price of Rs.2500

    per share. After one year he sold the shares for Rs.2700. Reliance paid out a dividend of Rs.100 per share during that year. Rahul made a percentage return of _________ on the Reliance shares; his % return would have ________ had he bought 250 shares instead of 100 shares of Reliance.
    A 12.50%; increased Correct Answer Incorrect Answer
    B 8%; remained same Correct Answer Incorrect Answer
    C 8%; decreased Correct Answer Incorrect Answer
    D 12%; remained same Correct Answer Incorrect Answer
    E 11.11%; decreased Correct Answer Incorrect Answer

    Solution

    Total profit per share = dividend + capital gain = Rs. 100 + (Rs.2700 - Rs.2500) = Rs. 300 per share % return = total return/cost = 300/2500 = 12%. The percentage return is unaffected by the number of shares till the cost of purchase remains the same.

    Practice Next
    More Financial Management Questions

    Relevant for Exams:

    ask-question