question from the book -ML aggarwal ( avichal publication)class 10th , chapter3, shares and dividends ……..
this question has high frequency of being asked in question .
it is given that By investing Rs. 7500 in a company paying 10 percent dividend,
an income of Rs. 500 is received.
so we have to find What price is paid for each Rs. 100 share.
please solve it with explanation .
Q no. 18, exercise 3, ML Publication, share and dividends
Total investment = Rs. 7,500
Nominal value of 1 share = Rs. 100
No. of shares purchased = y
Nominal value of y shares = 100 × y = Rs. (100y)
Dividend % = 10%
Dividend = Rs. 500
∴ 10% of 100y = Rs. 500
⟹ (10/100) ×100y= 500
⟹ y = 500/10 = 50 shares
∴ Market value of 1 share = 7,500/50=150 Ans