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Mr. Vijay purchased 50 shares of face value Rs. 100 and market value of share is Rs.120.The company had announced dividend of 10%. Find the rate of return on investment |
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Answer» -step explanation:FV=Rs.100MV=Rs.80Number of shares PURCHASED =50Sum invested = Number of shares purchased × MV of each share =50×80=Rs.4,000Dividend RECEIVED on each share =20 % of FV of each share =20% of Rs. 100 =10020×100=Rs.20Total dividend received = Number of shares purchased × Dividend received on each share =50×20=Rs.1000∴ Rate of return on investment =Sum−investedTotal−dividend−received×100% =40001000×100% =25%THUS, the rate of return on investment is 25% |
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