Aptitude - Stocks and Shares - Discussion

Marketing value = 96.

Face value = 650.

Annual dividend = 10%of face value = 10\100*650 = 65.

An investment at Rs. 96 is = 65*96 = 6240.

I think it should be like:

10% on 96= Rs.9.6
9.6--->96
for, 650---> 96*650/9.6=6500 not 6240

I agree with what shivani posted. Cause it was not mentioned that 650 was the face value.

Market value is Rs.96.

Dividend is 10%.

If we go through the formula.

Rate of interest p.a. = 10*100/96 would give us 10.42%.

So if we invest Rs.6240 we would get income of Rs.650.

Why income is face value? will you explain me?

10% of share value 96* profit = investment.

9.6*650 = 6240.

What is the face value and market value?

Face value is 96.

96*10% = 9.6.

9.6*650 = 6240.

When stocks are out we have a base value.

Here base value = 100 as per BSE Sensex.

So 10% stock means profit is 10% of base value.

Profit from investment in 1 share (Rs 96) is Rs 10.

So investment of Rs 1 yields Rs 10/96 profit.

So Rs x investment yields Rs (10/96) *x profit, which is Rs 650.

So investment x = Rs 6240.

Guys.

Current Market Value = Rs. 96.
Required Income = Rs. 650.

Face Value is not given. We always assume face value as Rs. 100 when it's not mentioned in the question. and dividend is always given on face value!. So you earn Rs. 10 (i.e 10% of Face Value which is 100) even if you purchase the shares at Rs. 96 (which is the current market value).

So if you earn Rs. 10 on each share, you need 65 shares to earn Rs 650. at current market price Rs. 96, you need to invest 96*65 which is Rs. 6240.

Hope this helps.