A man invests Rs 22500 in Rs 50 shares available at 10% discount. If the dividend paid by the company is 12%, calculate his rate of return.
Answer & explanation
Correct answer: option 3
The correct answer is option (3) : $13\frac{1}{3}$%
Cost of investment $=₹22500$
Market value of 1 share $=₹(50-10$% of $50) = ₹ 45$
∴ No. of shares bought $=\frac{₹22500}{₹45}= 500$
Total dividend earned by man $= 500×12$% of $₹50 = ₹3000$
So, rate of return $=\frac{3000}{22500}×100$%=$13\frac{1}{3}$%