Same chapter4 marksDifficulty: Medium
A man holds 500 shares of nominal value ₹10 bought at ₹16 each. If the dividend is 8%, find his percentage return.
Shares and Dividends
3 marksDifficulty: Medium
Explain why the dividend on a share is calculated on the nominal value and not on the market value.
Original Khojo Papers practice question — not from a past board paper.
Answer
The dividend is the share of the company's profit attached to each share, and a share entitles its holder to a fixed fraction of the capital, which is measured by its nominal value. The market value is only what an investor happens to be paying for that entitlement on a given day, and it changes without the company's capital changing at all.
No citable source has been recorded for this record. Treat it as practice material, not as fact.
Explanation
This is why two investors who paid different prices for the same share receive the same dividend per share.
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