Question

Amit bought 24 shares of FV 100 by investing 3000,8% dividend was declared on shares. Find (1) the MV of the share (2) dividend received (3) the rate of return on investment.

Answer 1

Hint: This is a very easy question which can be easily solved by knowing the concept of market value (M.V.) , Fixed Value (F.V.), dividend rate (R%) and rate of return(ROR%).
Market value (M.V.) per share= $\dfrac{{T.I.(total\_investment)}}{{N(no\_of\_shares)}}$ ,
Dividend per share = Dividend Rate × Face Value
=(R%)×(F.V.),
Rate of return(ROR%)= $\dfrac{{(Total\_\operatorname{Re} turn)}}{{Total\_Investment}}$ ×100, etc.

Complete step-by-step answer:
Given: No. of shares= 24,
Fixed Value (F.V.)= 100,
Total Investment= 3000,
Dividend Rate(R%)= 8%,
Hence we simply solve the problem by using the formulae i.e.,
Market value (M.V.) per share= $\dfrac{{T.I.(total\_investment)}}{{N(no\_of\_shares)}}$ …………(1)
Dividend per share = Dividend Rate × Face Value
 =(R%)×(F.V.) ………….(2)
Rate of return(ROR%)= $\dfrac{{(Total\_\operatorname{Re} turn)}}{{Total\_Investment}}$ ×100 ….(3)
From (1),
The Market value (M.V.) per share = $\dfrac{{3000}}{{24}}$ = 125
From(2),
Dividend per share= (R%)×(F.V.) = (8%)×100
 =$\dfrac{8}{{100}}$×100=8
Total Dividend= Dividend per share× No. of shares
 =8×24=192
From(3),
Rate of Return (ROR%)= $\dfrac{{192}}{{3000}}$ ×100= $\dfrac{{19200}}{{3000}}$ = $\dfrac{{192}}{{30}}$ = 6.4%
Hence, finally we can say that,
1. the MV of the share = Rs. 125
2. dividend received = Rs. 192
3. the rate of return on investment = 6.4%

Note: Either % should be converted into $\dfrac{1}{{100}}$ or for getting % we should multiply by 100.