Stocks and Shares Practice Test 2

Question : 31 of 36

Marks: +1, -0

Ms Anita brought the shares of xyz company which has a face value of Rs 100. The company declared a dividend of 15% but Mr Dinesh’s rate of return on the investment was only 12%. At what market price did he purchase the shares (There was no brokerage involved)?

Validate

Solution:

Dividend on one share

={\Rate \of \Dividend }/{ 100}×\Face \value \of \one \share

=15/100×100=15

∴ Rate of Return on investment

= \text" Dividend on one share "/\text"Purchase price of 1 share "×100

∴12=15/\text"Purchase price of 1 share"×100

∴ Purchase price of 1 share

=15/12×100=125

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