Mahesh Kulkarni invests ₹10000 in 10% ₹100 shares of a company. If his annual dividend is ₹800, find :

(i) the market value of each share.

(ii) the rate percent which he earns on his investment.

(i)
Let the market value of each share be ₹x

Total Investment of Mahesh Kulkarni = ₹10000

$\therefore \text{No. of shares} = \dfrac{10000}{x}$

Nominal Value per share = ₹100

Rate of Dividend = 10%

Annual Dividend = ₹800

Annual Dividend = No. of shares x Rate of Dividend x Nominal Value per share

According to the given,

$800 = \dfrac{10000}{x} \times \dfrac{10}{100} \times 100 \\[0.5em] 800 = \dfrac{100000}{x} \\[0.5em] x = \dfrac{100000}{800} \\[0.5em] x = 125$

∴ Market Value of each share = ₹125

(ii)
$\% \text{Return} = \Big(\dfrac{\text{Annual Inc.}}{\text{Investment}} \times 100\Big)\% \\[0.5em] = \Big(\dfrac{800}{10000} \times 100\Big) \% \\[0.5em] = \bold{8\%}$

∴ Rate percent Mahesh Kulkarni earns on his investment = 8%