Question

The nominal value of the shares of company X and Y is 10. The market price of stocks is 740 and 750, respectively. Find an investor's return on investment rate if dividends are 20% and 40% respectively. In both cases, the investment is the same.

Answer 1

To calculate the investor's return on investment rate, divide the dividend by the market price and multiply by 100%. For company X, the rate is 2.7% and for company Y, the rate is 5.3%.

Step-by-step explanation:

To calculate the investor's return on investment rate, we need to consider the dividends and the market price of the stocks. For company X, the market price is $740 and the dividend is 20%. For company Y, the market price is $750 and the dividend is 40%. The formula to calculate the return on investment rate is:

Return on Investment Rate = (Dividend / Market Price) x 100%

Let's calculate the return on investment rate for both companies:

Company X: (20% / $740) x 100% = 0.027% or 2.7%

Company Y: (40% / $750) x 100% = 0.053% or 5.3%