Question

A man buys Rs. 25 shares in a company which pays 9% dividend. The money invested is such that it gives 10% on investment. At what price did he buy the shares?

• A. 22.5
• B. 28
• C. 30
• D. 25
• E.

Hint:

To find the price of a share based on dividend and return percentage, use: \[ \text{Price} = \frac{\text{Dividend per share}}{\text{Return percentage}}. \]

Answer 1

The Correct Option is A

Step 1: Calculate the dividend per share. Since the dividend is 9% of Rs. 25, we have: \[ \text{Dividend per share} = \frac{9}{100} \times 25 = 2.25. \] Step 2: The investment yields a 10% return on the purchase price, meaning the price at which the share is bought is: \[ \frac{2.25}{10\%} = \frac{2.25}{0.10} = 22.5. \] Thus, the purchase price of the share is Rs. 22.50.