Question

A man buys 75, Rs 100 shares of a company which pays 9 per cent dividend. He buys shares at such a price that he gets 12 per cent of his money. At what price did he buy the shares?

Answer 1

Nominal value of 1 share = Rs 100

Nominal value of 75 shares = 100 × 75 = Rs 7500

Dividend% = 9%

∴ Dividend = 9% of Rs 7500

= 9/100 × Rs 7500 = Rs 675

Let market price of 1 share = Rs y

Then market price of 75 shares = Rs y

Profit% on investment = 12%

12% of 75 y = Rs 657

⇒ 12/100 × 75 y = Rs 657

Let market price of 1 share = Rs y

Then market price of 75 shares = Rs 75 y

Profit% on investment = 12%

12% of 75 y = Rs 657

⇒ 12/100 × 75 y = Rs 657

⇒12/100 × 75 y = Rs 657

⇒ y = Rs 75