We will discuss here about the dividend and rate of dividend. The part of the annual profit of a company distributed among its shareholders is called dividend. The dividend is always declared by the company on the face value (FV) of a share irrespective of its market value. The rate of dividend is expressed as a percentage of the face value of a share per annum.
Definition of Dividend: The profit which a share holder gets (out of the profits of the company) for his investment from the company is called dividend.
I. Meaning of the statement “r % $ 100 shares at $ P”
The statement r % $ 100 shares at $ P means the following:
1. The face value of a share is $ 100.
2. The market value of a share is $ P.
3. The dividend (profit) on a share is r % on NV, i.e., $ r per annum.
4. The income from one share for one year is $ r on $ P.
II. Meaning of the statement “r % $ K shares at $ P”
The statement r % $ K shares at $ P means the following:
1. The face value of a share is $ K.
2. The market value of a share is $ P.
3. The dividend (profit) on a share is r% on $ K, i.e., $ \(\frac{rK}{100}\) per annum.
4. The income from one share for one year is $ \(\frac{rK}{100}\)on $ P.
For Example:
“20 % of $ 100 shares at $ 140” means that
1. The face value of a share is $ 100.
2. The MV of 1 share is $ 140.
3. The dividend on 1 share is 20 % of $ 100 = $ 20 per annum.
4. The income from on $ 140is $ 20 for one year.
Similarly, “25 % of $ 35 shares at a discount of $ 15” means that
1. The NV of a share is $ 35
2. The MV of 1 share is $ 35  $ 15 = $ 20.
3. The dividend on 1 share is 25 % of $ 35 = $ (\(\frac{25}{100}\) × 35) = $ 8.75 per annum.
4. The income from on $ 20 is $ 8.75 for one year.
From Dividend and Rate of Dividend to HOME
Didn't find what you were looking for? Or want to know more information about Math Only Math. Use this Google Search to find what you need.
