A man buys Tk. 40 shares in a company which pays 10% dividend. If the man gets 12.5% on his investment, at what price did he buy the shares?

Question: A man buys Tk. 40 shares in a company which pays 10% dividend. If the man gets 12.5% on his investment, at what price did he buy the shares?

Solution:
Dividend on 40 share = 10%
∴ Dividend on 1 share = (10 × 40)/100
= Tk. 4
Tk. 12.50 is an income on an investment of Tk. 100
Tk. 4 is an income on an investment of = (100 × 4)/12.50
= (100 × 4 × 10)/125
= Tk. 32

∴ Cost of 1 share = Tk. 32