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Asked by Kanwaranita10 | 3rd Mar, 2020, 02:41: PM

Expert Answer:

A company with 500 shares of nominal value of Rs. 120 declares an annual dividend of 15%. Calculate:
(i) the total amount of dividend paid by the company.
(ii) annual income of Mr. Sharma who holds 80 shares of the company.
If the return percent of Mr. Sharma from his shares is 10%, find the market value of each share.
Solution:-
Given: Number of shares = 500
Nominal value of each share = Rs. 120, dividend=15%
Nominal value of 500 shares = 500 x 120 = Rs. 60000
Total amount of dividend paid by the company = 15% of Nominal value = Rs. 9000
(ii)
Annual income of Mr. Sharma = Dividend one one share x Number of shares 
= (15% of 120) x 80 = Rs. 1440
Let the market value for each share be Rs. x
M.V. of 1 share = Rs. x
Income % on M.V. = Dividend % on N.V.
10% of x = 15% of 120
Therefore, x = 180

Answered by Renu Varma | 3rd Mar, 2020, 06:25: PM