Question:

A man buys Rs. 20 shares paying 9% dividend. The man expects to have an interest of 12% on his money. The market value of each share is:

Show Hint

To calculate the market value of a share, divide the dividend by the expected return percentage.
Updated On: Aug 18, 2025
  • Rs. 18
  • Rs. 15
  • Rs. 12
  • Rs. 21
Hide Solution
collegedunia
Verified By Collegedunia

The Correct Option is B

Solution and Explanation

Let the market value of each share be \( x \). The dividend is 9% on the face value of Rs. 20, which is: \[ \text{Dividend per share} = 9% \times 20 = 1.8 \] The man expects a return of 12% on his investment, so: \[ \text{Expected return} = 12% \times x \] Equating the dividend to the expected return: \[ 1.8 = 0.12 \times x \] \[ x = \frac{1.8}{0.12} = 15 \]
Was this answer helpful?
0
0

Questions Asked in CLAT exam

View More Questions