1.

A company, with 10,000 shares of Rs. 100 each, declares an annual dividend of 5%.(i) What is the total amount of dividend paid by the company?(ii) What should be the annual income of a man who has 72 shares in the company?(iii) If he received only 4% of his investment, find the price he paid for each share.

Answer»

Nominal value of 1 share = Rs. 100

Nominal value of 10,000 shares = 10,000 × Rs. 100 = Rs. 10,00,000

(i) Dividend% = 5%

Dividend = 5% of Rs. 10,00,000

= (5/100) × Rs.10,00,000 = Rs. 50,000

(ii) Nominal value of 72 shares = Rs. 100 × 72 = Rs. 7,200

Dividend = 5% of Rs. 7,200

= (5/100) × Rs.7,200 = Rs. 360

(iii) Let market value of 1 share = Rs y

Then market value of 10,000 shares = Rs. (10,000y)

Return% = 4%

4% of Rs. (10,000y) = Rs. 50,000

⟹ (4/100) ×10,000 = Rs.50,000

⟹ y = Rs. 125.



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