What is market value of a 8% stock,in which an income of Rs. 660 is derived by investing Rs. 2200,brokerage being 3/4%?

Question

What is the market value of a 8.5% stock, in which an income of Rs. 341 derived by investing Rs. 3900, brokerage being 3/4%?

Answer 1

Rs.25.92

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Assume that face value = Rs.100
Dividend per share = Rs.8 (as it is 8% stock)
By investing Rs.2200, earnings = Rs.660
To get an earning of Rs.8, investment required = (2200*8)/660 = Rs.26.67
market value of Rs. 100 stock = Rs.(26.67- 3/4) = Rs.25.92