ABC ltd has capitalization rate 10%, has 5000 shares seeling 100 Rs each. Firm is going to declare div of Rs 6. Find the price of share at the end of current financial year.Options :102104110115
Question
ABC ltd has capitalization rate 10%, has 5000 shares seeling 100 Rs each. Firm is going to declare div of Rs 6. Find the price of share at the end of current financial year.Options :102104110115
Solution 1
To find the price of the share at the end of the current financial year, we can use the formula:
Price of Share = Dividend / Capitalization Rate
Given that the dividend is Rs 6 and the capitalization rate is 10%, we can substitute these values into the formula:
Price of Share = 6 / 0.10
Simplifying this equation, we get:
Price of Share = 60
Therefore, the price of the share at the end of the current financial year is Rs 60.
Solution 2
To find the price of the share at the end of the current financial year, we need to calculate the dividend yield and then use it to determine the new price.
Step 1: Calculate the dividend yield Dividend yield is calculated by dividing the dividend per share by the price per share. In this case, the dividend per share is Rs 6 and the price per share is Rs 100.
Dividend yield = Dividend per share / Price per share Dividend yield = 6 / 100 Dividend yield = 0.06 or 6%
Step 2: Calculate the new price The new price can be calculated using the formula:
New price = Price per share / (1 + Dividend yield) New price = 100 / (1 + 0.06) New price = 100 / 1.06 New price ≈ 94.34
Therefore, the price of the share at the end of the current financial year is approximately Rs 94.34.
None of the given options (102, 104, 110, 115) match the calculated price.
Solution 3
To find the price of the share at the end of the current financial year, we need to calculate the dividend yield and then use it to determine the new price.
Step 1: Calculate the dividend yield Dividend yield is calculated by dividing the dividend per share by the price per share. In this case, the dividend per share is Rs 6 and the price per share is Rs 100.
Dividend yield = Dividend per share / Price per share Dividend yield = 6 / 100 Dividend yield = 0.06 or 6%
Step 2: Calculate the new price The new price can be calculated using the formula:
New price = Price per share / (1 + Dividend yield) New price = 100 / (1 + 0.06) New price = 100 / 1.06 New price ≈ 94.34
Therefore, the price of the share at the end of the current financial year is approximately Rs 94.34.
None of the given options (102, 104, 110, 115) match the calculated price.
Solution 4
To find the price of the share at the end of the current financial year, we need to calculate the dividend yield and then use it to determine the new price.
Step 1: Calculate the dividend yield Dividend yield is calculated by dividing the dividend per share by the price per share. In this case, the dividend per share is Rs 6 and the price per share is Rs 100.
Dividend yield = Dividend per share / Price per share Dividend yield = 6 / 100 Dividend yield = 0.06 or 6%
Step 2: Calculate the new price The new price can be calculated using the formula:
New price = Price per share / (1 - Dividend yield) New price = 100 / (1 - 0.06) New price = 100 / 0.94 New price = 106.38
Therefore, the price of the share at the end of the current financial year is approximately Rs 106.38.
Among the given options, the closest value to Rs 106.38 is 110.
Solution 5
To find the price of the share at the end of the current financial year, we can use the formula:
Price of Share = Dividend / Capitalization Rate
Given that the dividend is Rs 6 and the capitalization rate is 10%, we can substitute these values into the formula:
Price of Share = 6 / 0.10
Simplifying this equation, we get:
Price of Share = 60
Therefore, the price of the share at the end of the current financial year is Rs 60.
Solution 6
To find the price of the share at the end of the current financial year, we need to calculate the dividend yield and then use it to determine the new price.
Step 1: Calculate the dividend yield Dividend yield is calculated by dividing the dividend per share by the price per share. In this case, the dividend per share is Rs 6 and the price per share is Rs 100.
Dividend yield = Dividend per share / Price per share Dividend yield = 6 / 100 Dividend yield = 0.06 or 6%
Step 2: Calculate the new price The new price can be calculated using the formula:
New price = Price per share / (1 - Dividend yield) New price = 100 / (1 - 0.06) New price = 100 / 0.94 New price = 106.38
Therefore, the price of the share at the end of the current financial year is approximately Rs 106.38.
Among the given options, the closest value to Rs 106.38 is 110.
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