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Chapter: Financial Planning· Mathematics Part 1 (Algebra)

Asked in: March 2025 board paper; July 2025 board paper (same with 150 shares, answer 5.83%); March 2024 board paper (50 shares of FV ₹ 10 at MV ₹ 25, 30% dividend, answer 12%)Q.8 Shri Maniklal has purchased 300 shares of F.V. ₹ 100, for M.V. ₹ 120.…

Asked in: March 2025 board paper; July 2025 board paper (same with 150 shares, answer 5.83%); March 2024 board paper (50 shares of FV ₹ 10 at MV ₹ 25, 30% dividend, answer 12%)

Q.8 Shri Maniklal has purchased 300 shares of F.V. ₹ 100, for M.V. ₹ 120. Company has paid dividend at 7%. Complete the following activity to find the rate of return on his investment.

Activity:
F.V. = ₹ 100, Number of shares = 300, Market value = ₹ 120
(a) Sum invested = M.V. × No. of shares = ____ × ____ = ₹ 36,000
(b) Dividend per share = F.V. × rate of dividend = 100 × ____ = ₹ 7
Total dividend received = 300 × 7 = ₹ ____
(c) Rate of return = \(\dfrac{\text{Dividend income}}{\text{Sum invested}} \times 100 = \dfrac{2100}{36000} \times 100\) = ____ %.

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Answer: Rate of return = 5.83% (exactly \(5\tfrac{5}{6}\%\))

(a) Sum invested = M.V. × No. of shares = 120 × 300 = ₹ 36,000

(b) Dividend per share = F.V. × rate of dividend = \(100 \times \dfrac{7}{100}\) = ₹ 7

Total dividend received = 300 × 7 = ₹ 2,100

(c) \(\text{Rate of return} = \dfrac{2100}{36000} \times 100 = \dfrac{35}{6} = 5.83\%\)

Note: rate of return is always worked out on the money actually invested (MV), not on the face value. That is why it is less than the 7% dividend rate.

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