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Question
Mr. M buys Rs. 80(face value) shares paying 14% dividend. If his investment is getting him an interest of Rs. 7%, what is the market value of the share?
A
160.
B
170.
C
175.
D
180.
Soln.
Ans: a
Ans: a
Dividend on share of Rs. 80 is $14/100$ × 80.
Rs. 7 is earned on an investment of Rs. 100.
So the dividend $14/100$ × 80 is earned on $100/7$ × $14/100$ × 80 = Rs. 160.