Question

    A man buys 200 shares of face value ₹100 each at

    ₹120 per share. The company declares a dividend of 15%. Find the rate of return on his investment.
    A 22.5% Correct Answer Incorrect Answer
    B 20.2% Correct Answer Incorrect Answer
    C 12.5% Correct Answer Incorrect Answer
    D 4.5% Correct Answer Incorrect Answer

    Solution

    ATQ,

    Let’s break it down: Face value (FV) = ₹100 Market price (MP) = ₹120 Dividend rate = 15% (always on FV) Number of shares = 200 Dividend per share = 15% of ₹100 = ₹15 So total dividend = 200 × 15 = ₹3000 He invested 200 × 120 = ₹24,000 Rate of return = (Dividend / Investment) × 100 = (3000 / 24,000) × 100 = 12.5%

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