By investing ₹4650 in a $7\frac{1}{2}$% stock, a person obtains an income of ₹300. The market price of the stock is:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹116.25
Investment = Rs. 4,650
Nominal Interest = $\frac{15}{2}\%=7.5\%$
Income obtained = Rs. 300
$\text{Income}=\frac{\text{Nominal Value×No. of shares×Dividend}}{100}$
$\text{No. of shares} = \frac{\text{Investment}}{\text{Market Price}}=\frac{4650}{M}$
$⇒\frac{4650}{M}×\frac{7.5}{100}×100=300$
$⇒M=\frac{34875}{300}=116.25$