A man buys Rs.25 shares in a company which pays 9% dividend. The money invested by the person is that much as given 10% on investment. At what price did he buy the shares?
Face value of 1 share = Rs. 25
Dividend on 1 share = Rs. (9/100 * 25) = Rs. 9/4
Now Rs. 10 is an income on an investment of Rs. 100
Therefore Rs. 9/4 is an income on an investment of Rs. (100/10 * 9/4)
= Rs. 22.50
Hence, const of share = Rs. 22.50