Question

A company declares a dividend of 12% on Rs.100 shares. A housewife buys such shares and gets 15% on her investment. At what price she bought the shares?
A. Rs.80
B. Rs.85
C. Rs.125
D. Rs.76

Answer 1

Hint: A stock dividend is an increase in the no. of shares of a company. Dividend on Rs. 100 shares is Rs. 12. Let the price she bought the shares is x, then the 15% of x will be 12. Use this information to find the value of x.

Complete step-by-step answer:
We are given that a company declares a dividend of 12% on Rs.100 shares and a housewife buys such shares and gets 15% on her investment.
Dividend is the amount given by the company at the end of the year to the share holder.
The present value of the share is 100 rupees.
And the dividend of 12% on Rs.100 shares is 12 rupees.
Let the price at which the housewife bought the shares is x.
Then 15 percent of the price x is Rs. 12.
 $
\Rightarrow \to 15\% ofx = Rs.12 \\
\Rightarrow \dfrac{{15x}}{{100}} = 12 \\
\Rightarrow x = \dfrac{{12 \times 100}}{{15}} \\
  \therefore x = 80 \\
  $
The price at which the housewife bought the shares is Rs. 80.

So, the correct answer is “Option A”.

Note: Another approach
We are given that a company declares a dividend of 12% on Rs.100 shares and a housewife buys such shares and gets 15% on her investment. The present value of the share is 100 rupees.
Let the price at which the housewife bought the shares is x.
Therefore 15% of Rs. x is equal to 12% of Rs. 100.
 $
\Rightarrow \dfrac{{15}}{{100}} \times x = \dfrac{{12}}{{100}} \times 100 \\
\Rightarrow \dfrac{{15x}}{{100}} = 12 \\
\Rightarrow x = \dfrac{{1200}}{{15}} \\
  \therefore x = 80 \\
  $
The price at which the housewife bought the shares is Rs. 80.