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Mac buys 200 shares of par value $ 10 each, of a company, which pays an annual dividend of 8% at such a price that he gets 10% on his investment. Find the market value of share.
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- $ 8
- $ 10
- $ 6
- $ 12
Correct Option: A
Here , Face value of each share = $ 10
Number of share = 200
Par value of 200 shares = Number of share x Face value of each share
= $ (200 × 10) = $ 2000
Dividend received by Mac = 8% of Par value of 200 shares
| = $ |  | x 2000  | = $ 160 | 100 |
Let, the market value of 200 shares be $ x.
We have to find x such that 10% of x = 160
| ⇒ | 10 | × x = 160 |  |
| 100 |
⇒ x = 160 × 10 = 1600
i.e., Market value of 200 shares = $ 1600.
Hence, the market value of one share
| = $ | | | Number of share |
| = $ | | | = $ 8 | 200 |
