Q7 of 55 Page 111

Market value of shares and dividend declared by the two companies is given below. Face Value is same and it is Rs. 100 for both the shares. Investment in which company is more profitable?

(1) Company A - Rs. 132 , 12%


(2) Company B - Rs. 144, 16%

Face Value = Rs. 100


Market value of Company A share = Rs. 132


Rate of Dividend = 12%


Dividend =


⇒ Dividend of Company A share =


Market value of Company B share = Rs. 144


Rate of Dividend of Company B share = 16%


Dividend =


⇒ Dividend =


Return% of Company A =


Return% of Company B =


Return % of Company B is more so company B is more profitable.


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