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A 6% stock yields 8%. The market value of the stock is:
- a)Rs. 133.33
- b)Rs. 96
- c)Rs. 75
- d)Rs. 48
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
A 6% stock yields 8%. The market value of the stock is:a)Rs. 133.33b)R...
For an income of Rs. 8, investment = Rs. 100.
For an income of Rs. 6,
investment = Rs.(100/8 × 6)
= Rs.75
For an income of Rs. 6,
investment = Rs.(100/8 × 6)
= Rs.75
Most Upvoted Answer
A 6% stock yields 8%. The market value of the stock is:a)Rs. 133.33b)R...
Calculation of Market Value of Stock
Given:
Yield of 6% stock = 8%
Let’s assume the face value of the stock to be Rs.100
Dividend paid = 6% of 100 = Rs. 6
Market Value of Stock = Dividend / Yield
= 6 / 8%
= Rs. 75
Therefore, the market value of the stock is Rs. 75.
Explanation
The yield of a stock is the dividend paid by the company to its shareholders in relation to the current market price of the stock. In this question, the yield of the 6% stock is 8%. This means that if the face value of the stock is Rs.100, then the dividend paid by the company is Rs.6.
The market value of the stock is calculated by dividing the dividend by the yield. In this case, it is 6/8% which is equal to Rs.75. Hence, the correct answer is option C.
Conclusion
To calculate the market value of a stock, one needs to know the yield and the face value of the stock. Dividing the dividend by the yield gives the market value of the stock.
Given:
Yield of 6% stock = 8%
Let’s assume the face value of the stock to be Rs.100
Dividend paid = 6% of 100 = Rs. 6
Market Value of Stock = Dividend / Yield
= 6 / 8%
= Rs. 75
Therefore, the market value of the stock is Rs. 75.
Explanation
The yield of a stock is the dividend paid by the company to its shareholders in relation to the current market price of the stock. In this question, the yield of the 6% stock is 8%. This means that if the face value of the stock is Rs.100, then the dividend paid by the company is Rs.6.
The market value of the stock is calculated by dividing the dividend by the yield. In this case, it is 6/8% which is equal to Rs.75. Hence, the correct answer is option C.
Conclusion
To calculate the market value of a stock, one needs to know the yield and the face value of the stock. Dividing the dividend by the yield gives the market value of the stock.
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A 6% stock yields 8%. The market value of the stock is:a)Rs. 133.33b)Rs. 96c)Rs. 75d)Rs. 48Correct answer is option 'C'. Can you explain this answer?
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A 6% stock yields 8%. The market value of the stock is:a)Rs. 133.33b)Rs. 96c)Rs. 75d)Rs. 48Correct answer is option 'C'. Can you explain this answer? for LR 2024 is part of LR preparation. The Question and answers have been prepared according to the LR exam syllabus. Information about A 6% stock yields 8%. The market value of the stock is:a)Rs. 133.33b)Rs. 96c)Rs. 75d)Rs. 48Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for LR 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A 6% stock yields 8%. The market value of the stock is:a)Rs. 133.33b)Rs. 96c)Rs. 75d)Rs. 48Correct answer is option 'C'. Can you explain this answer?.
A 6% stock yields 8%. The market value of the stock is:a)Rs. 133.33b)Rs. 96c)Rs. 75d)Rs. 48Correct answer is option 'C'. Can you explain this answer? for LR 2024 is part of LR preparation. The Question and answers have been prepared according to the LR exam syllabus. Information about A 6% stock yields 8%. The market value of the stock is:a)Rs. 133.33b)Rs. 96c)Rs. 75d)Rs. 48Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for LR 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A 6% stock yields 8%. The market value of the stock is:a)Rs. 133.33b)Rs. 96c)Rs. 75d)Rs. 48Correct answer is option 'C'. Can you explain this answer?.
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