Joni buys a Tk.40 shares in a company, which pays a 10% dividend. Joni buys the share at such a price that his profit is 16% on his investment. At what price did Joni buy the share?

Question: Joni buys a Tk.40 shares in a company, which pays a 10% dividend. Joni buys the share at such a price that his profit is 16% on his investment. At what price did Joni buy the share?

Solution:
Dividend (profit) given by the company on 1 share = 10% of 40 = Tk. 4.
Suppose the man buys one share for x.

Therefore, Joni’s profit = 16% of x = 16x/100
According to the problem, 16x/100 = 4
⇒ x = Tk. 25

Joni bought the share at Tk. 25.