Aptitude - Stocks and Shares - Discussion

Discussion :: Stocks and Shares - General Questions (Q.No.2)

2. 

A man bought 20 shares of Rs. 50 at 5 discount, the rate of dividend being 13. The rate of interest obtained is:

[A].
12 1 %
2
[B].
13 1 %
2
[C]. 15%
[D].
16 2 %
3

Answer: Option C

Explanation:

Investment = Rs. [20 x (50 - 5)] = Rs. 900.

Face value = Rs. (50 x 20) = Rs. 1000.

Dividend = Rs. 27 x 1000 = Rs. 135.
2 100

Interest obtained = 135 x 100 % = 15%
900


Shoeb said: (Dec 2, 2010)  
How this is done. I have not understood.

Krishna said: (Dec 16, 2010)  
Hi soheb dont worry i will explain u
face value is actual value of the share ie

he bought 20 shares at 50 rs
hence face value of 1 share is 50 rs
for 20 shares is 50*20 = 1000rs

now investment or market value is the value calculated after
giving the discount

here discount given is 5rs for 50 rs

so market value for 50 rs is 45 rs

hence market value for 20*50rs is 20*45 = 900rs

now, dividend is always calculated on
FACE VALUE(which is always constant)

so dividend is 13 1/2 is 27/2 % of face value

is dividend = (27/2)*1000 %

= 13500 %
= 13500/100 = 135 rs

now rate of interst = (dividend*100)/market value %

= (135*100)/900 %
15 %

my suggestion to u just go through the imp formulas .... twice

I think u will find some problem in understanding what i have
explained . but u go through the formulas and still u cant understand post ur doubt i will try to explain u the short cut method

Nirbhay said: (Jan 6, 2011)  
I have understand.

Bhagyashri said: (Aug 28, 2011)  
If 20 shares @50 rs then 20*50=1000....but discount rs5 then it will be 20 shares in 45 rs ie. 20*45=900...thus man saves rs 100..

dividend rate is 13 1/2 =27/2.
He got dividend on rs 1000 @27/2
if 1000 is 100%
then ? is 27/2%

by cross multyplication it will be 1000*27/2/100
=135


if 900 is 100% then how much percent is 135

135*100/900= it will be = 15

Siva said: (Oct 17, 2011)  
Well said bhagya.

Minakshi said: (Feb 17, 2012)  
What is dividend?

A.John Felix said: (Mar 10, 2012)  
@ minakshi: its the amount (share on profit) given to a share holder every year.

Saroja said: (Aug 31, 2012)  
Thanks Mr.Krishna.

Ravi Kiran Narra said: (Apr 13, 2013)  
Use this formula u can get easy way to answer.

Rate of return * Market value = Rate of dividend * face value.

Rate of return *45 = 27/2* 50.

So Rate of return = (27*50)/(2*45).

= 15.

Bharathi said: (Mar 17, 2014)  
How rate of dividend is calculated as 27/2?

Tanuvi said: (May 9, 2014)  
@Bharthi. The improper fraction of 13 and a half is 27/2 [(2*13)+1].

Sanju said: (Jul 21, 2015)  
Its easy folks think out of box ;).

Kavya said: (Sep 11, 2015)  
What is the relationship between dividend and interest?

Nipun Jain said: (Sep 14, 2015)  
The simplest method and easy to understand is :-.

He gets dividend of 27/2 on a Rs. 50 (Face value share).

Dividend is money given on the face value of share of the company you purchase which is set by the company no matter you buy it at a discount or a profit.

So here dividend of Rs. 50 share will be = 27/2 * 50/100 per share = 27/4.

No. of shares = 20.

Total Dividend (Income) = 20*27/4 = Rs. 135.

Rate of Interest = Income/Investment * 100.

Investment = 20* (50-5) = 900.

Rate of Interest = 135/900*100 = 15%.

Balaji said: (Mar 4, 2016)  
Actually dividend is calculated as per face value.

Here, face value = 1000,
Dividend = 135,

Interest will be 135*100/1000 = 27/2%.
Is it or not?

Will you please clarify me?

Abhishek said: (Jun 24, 2016)  
@Balaji.

Interest = Dividend * 100/market value.
Here M.V. = 900 not 1000.

Ebenezer said: (Jun 25, 2016)  
@Balaji.

I understood your explanation. Thank you.

Leo said: (Aug 2, 2016)  
Guys! I want to ask a question, because I don't get it how it could be solved!!

How many Rs. 25 shares at Rs 3 discount can be bought for Rs 2222, brokerage being 1%?

Poonam said: (Aug 9, 2016)  
Actually, I have of listened a lecture on stock and shares. There it was said that total dividend is equal to a number of stocks multiply by dividend percentage. So my answer was 30 percent. I am really confused. Please explain.

Komal said: (Feb 15, 2017)  
Simply 50 - 5 = 45.

20 * 45=900.
100 * 13.5=135.
Face value: 20 * 50 = 1000,
135 ÷ 900 * 100 = 15%.

Habib Rahman said: (Jun 2, 2017)  
20 * 50 = 1000, 20 * 45 = 900, 27 * 1000/2 * 100 = 135, 135 * 100/900 = 15%.

Nikhitha said: (Sep 8, 2018)  
Thank you @Krishna.

Saru said: (May 5, 2020)  
Yes, Understand, Thank You @Krishna.

Adheer said: (Dec 30, 2020)  
Face value = Rs. 50, Dividend = Rs. 27/2.
Market value = After Rs. 5 discount = 50 - 5 = Rs. 45,
Interest rate = Dividend / Market value * Face value.
= 27/2 / 45 * 50,
= 15,
= 15 %.

Mrityunjay said: (Jul 24, 2021)  
27/2 rupees on 100 as dividend refers.
In question's case, it is 27/2 rupees on investing 90rs,
So simply find out 27/2 is what percent of 90.
(27/2)*100 /90 = 15.
That is the profit.

Yeshi Samdup said: (Aug 11, 2021)  
Great one, Thanks @Krishna.

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