A man buys Rs. 50 shares in a company which pays 10% dividend. If the man gets 12.5% on his investment, at what price did he buy the shares ?

A. Rs. 35.50

B. Rs. 40

C. Rs. 48

D. Rs. 52

Answer: Option B

Solution(By Examveda Team)

Dividend on 1 share
= Rs. $$\left( {\frac{{10}}{{100}} \times 50} \right)$$  
= Rs. 5
Rs. 12.50 is an income on an investment of Rs. 100
Rs. 5 is an income on an investment of :
= Rs. $$\left( {100 \times \frac{2}{{25}} \times 5} \right)$$
= Rs. 40.
∴ Cost of 1 share = Rs. 40