Hundred rupee shares of a company are available in the market at a premium of Rs. 20. Find the rate of dividend given by the company, when a man’* return on his investment is 15 per cent.
Nominal value of 1 share = Rs. 100
Market value of 1 share = Rs. 100 + Rs. 20 = Rs. 120
Profit% on investment of 1 share =15%
Then profit = 15% of Rs. 120 = Rs. 18
∴ Dividend % = (18/100) ×100%=18% .
