A man buys Rs. 20 shares paying 9% dividend. The man expects to have an interest of 12% on his money. The market value of each share is a)Rs. 18b)Rs. 15c)Rs. 12d)Rs. 21Correct answer is option 'B'. Can you explain this answer?

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A man buys Rs. 20 shares paying 9% dividend. The man expects to have an interest of 12% on his money. The market value of each share is

a)
Rs. 18
b)
Rs. 15
c)
Rs. 12
d)
Rs. 21

Correct answer is option 'B'. Can you explain this answer?

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Given information:
- A man buys Rs. 20 shares.
- The shares pay a 9% dividend.
- The man expects to have an interest of 12% on his money.

To find:
The market value of each share.

Approach:
We can solve this problem using the formula for dividend yield, which is the dividend per share divided by the market value per share. The dividend yield is given as 9% and the expected interest is 12%. By equating the dividend yield to the expected interest, we can find the market value per share.

Solution:

Step 1: Define the variables:
- Let x be the market value of each share.

Step 2: Calculate the dividend per share:
- The dividend per share is given as 9% of the market value per share.
- Therefore, the dividend per share = 9% of x = 0.09x.

Step 3: Calculate the expected interest per share:
- The expected interest per share is given as 12% of the market value per share.
- Therefore, the expected interest per share = 12% of x = 0.12x.

Step 4: Set up the equation:
- The dividend yield is the dividend per share divided by the market value per share.
- Therefore, the dividend yield = (0.09x)/x = 0.09.
- Since the man expects to have an interest of 12% on his money, we can set up the equation as follows:
- 0.09 = 0.12x/x.

Step 5: Solve the equation:
- Simplifying the equation, we get:
- 0.09 = 0.12.
- Dividing both sides by 0.12, we get:
- x = 0.09/0.12 = 0.75.
- Therefore, the market value of each share is Rs. 0.75.

Step 6: Convert the market value into rupees:
- Since the man buys Rs. 20 shares, we can calculate the market value of each share as follows:
- Market value of each share = Rs. 20/0.75 = Rs. 26.67.

Conclusion:
The market value of each share is Rs. 26.67, which is not one of the given options. Therefore, none of the options (A, B, C, D) are correct.

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A man buys Rs. 20 shares paying 9% dividend. The man expects to have an interest of 12% on his money. The market value of each share is a)Rs. 18b)Rs. 15c)Rs. 12d)Rs. 21Correct answer is option 'B'. Can you explain this answer?

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