# Aptitude - Stocks and Shares - Discussion

Discussion Forum : 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:

Answer: Option

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 |

Discussion:

27 comments Page 1 of 3.
Shoeb said:
1 decade ago

How this is done. I have not understood.

Krishna said:
1 decade ago

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

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

(5)

Nirbhay said:
1 decade ago

I have understand.

(1)

Bhagyashri said:
1 decade ago

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

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

(1)

Siva said:
1 decade ago

Well said bhagya.

Minakshi said:
1 decade ago

What is dividend?

A.john felix said:
1 decade ago

@ minakshi: its the amount (share on profit) given to a share holder every year.

Saroja said:
1 decade ago

Thanks Mr.Krishna.

Ravi kiran narra said:
1 decade ago

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.

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.

(1)

Bharathi said:
1 decade ago

How rate of dividend is calculated as 27/2?

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