an important question from the book -ML aggarwal( avichal publication)class 10th , chapter3, shares and dividends ……..
we are given that A company declared a dividend of 14%.
we have to Find tire market value of Rs. 50 shares , condition is given that the return on the investment was 10%.
explain it in easy way.
Q no. 29, exercise 3, ML Publication, share and dividends
Given :
A company declared a dividend of 14%
The face value = Rs 50
The percentage of return investment = 10%
To Find :
The market value of Rs 50 share
Solution :
Let The market value = Rs x
∵ Face value of 1 share = Rs 50
Now, dividend on 1 share = 14% of Rs 50
= × Rs 50
= Rs 7
Now,
percentage of return investment × market value = dividend on 1 share
i.e 10 % of Rs x = Rs 7
Or, × x = Rs 7
∴ x =
i.e market value = x = Rs 70
Hence, The market value of Rs 50 shares is Rs 70 .