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:
12 1 %
2
13 1 %
2
15%
16 2 %
3
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 2 of 3.

Ebenezer said:   8 years ago
@Balaji.

I understood your explanation. Thank you.

Abhishek said:   8 years ago
@Balaji.

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

Balaji said:   8 years ago
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?

Nipun Jain said:   9 years ago
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%.
(1)

Kavya said:   9 years ago
What is the relationship between dividend and interest?

Sanju said:   9 years ago
Its easy folks think out of box ;).

Tanuvi said:   10 years ago
@Bharthi. The improper fraction of 13 and a half is 27/2 [(2*13)+1].

Bharathi said:   1 decade ago
How rate of dividend is calculated as 27/2?

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.
(1)

Saroja said:   1 decade ago
Thanks Mr.Krishna.


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