Quantitative Reasoning : Stocks and Shares Problem

Question

Ram buys Rs.100 shares at Rs.112. If he sells the shares after a year at Rs.132 after receiving a dividend of 8% just before selling, what is the net yield on his investment?

1. 17.85%
2. 6.06%
3. 32%
4. 25%
   
   

Correct Answer

Choice (4). 25%

Explanatory Answers

Purchase price of the share = Rs.112

Selling price of the share = Rs.132

Appreciation in price = Rs.20

Dividend received = 8% of face value = 8% of Rs.100 = Rs.8

Total amount of profit = Rs.20 + Rs.8 = Rs.28

Therefore, yield = = 25%

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