Ramesh has 150 shares of par value 10 each of a company which pays annual dividend of 15% at such a price that he receives 10% on his investment.what is the market value of share
To calculate the market value of a share, we need to consider the dividend yield and the dividend payout ratio.
First, let's find the annual dividend received by Ramesh:
Annual Dividend = Number of Shares * Par Value * Dividend Percentage
= 150 * 10 * 15%
= 225
Next, let's calculate the investment made by Ramesh:
Investment = Number of Shares * Par Value
= 150 * 10
= 1500
Now, let's calculate the dividend yield, which is the dividend received divided by the investment made:
Dividend Yield = (Annual Dividend / Investment) * 100
= (225 / 1500) * 100
= 15%
To find the market value of the share, we can use the formula for dividend yield:
Market Value = (Annual Dividend / Dividend Yield) * 100
= (225 / 15%) * 100
= 1500
Therefore, the market value of each share is 1500.