A person buys 1000 shares of a company (book value ₹10, paid up ₹5) at ₹50. If the company declares a dividend of 30%, then the percentage gain earned by the person on his investment is :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 3%
Initial investment = $1000×50$
$=50,000$
Dividend per share = $30\%×5=1.5$ per share
Total dividend = $1000×1.5=1500$
∴ Percentage gain = $\frac{Total\,Dividend}{Initial\,Investment}×100$
$=\frac{1500}{50,000}×100=3\%$