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.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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