Indian Institute of Foreign Trade 2009 Solved Paper

Question : 108 of 122

Marks: +1, -0

In 2006, Raveendra was allotted 650 shares of Sun Systems Ltd in the initial public offer, at the face value of Rs. 10 per share. In 2007, Sun Systems declared the bonus at the rate of 3 : 13. In 2008, the company again declared the bonus at the rate of 2 : 4. In 2009, the company declared a dividend of 12.5%. How much dividend does Raveendra get in 2009 as a percentage of his initial investment?

24.5%
23.9%
24.1%
23%

Validate

Solution:

Bonus share received in 2007

=650×(3/13)=150

Bonus share received in 2008

=800×(1/2)=400

So, has has

(150+400)=550

extra shares
Dividend of the share is always issued on face value irrespective of market value
Dividend = (Total value of shares) × (Percentage of dividend)
Dividend he will get

={1200×10×12.5/100}/{650×10}=1200/650×1/8=3/13=23%

Hence, option D is the correct answer.

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