A man buys Tk. 50 shares paying 8% dividend. The man wants to have an interest of 10% on his money. The market value of each share is:

Question: A man buys Tk. 50 shares paying 8% dividend. The man wants to have an interest of 10% on his money. The market value of each share is:

Solution:
Here, the face value of each share = Tk. 50
Dividend rate = 8%
dividend per share
= 8% of Tk. 50
= 50 × (8/100)
= Tk. 4

Now, the man wants 10% interest on his money.
That means Tk. 4 should be 10% of the market value.
Let,
Market value of each share = Tk. x
According to the question,
10% of x = 4
⇒ x × (10/100) = 4
⇒ x/10 = 4
⇒ x = 40

∴ The market value of each share is Tk. 40.